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How Bankruptcy Works in Mass Torts

Last updated 29th Jun 2022

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In many instances, defendants involved in mass tort litigation may face hundreds and sometimes thousands of lawsuits that represent potential liability when these cases are tried as a whole. 

It is important to have a global defense strategy against mass torts, but it may also be necessary to pursue and win cases specific to the defendant whenever possible. Defendants in a mass tort case can reduce the caseload by getting rid of bad or invalid cases to improve the public’s perception of the litigation.  

It is also crucial to understand that in case-specific victories, the plaintiff’s current, pending, or prior bankruptcy needs to be considered but is often overlooked. 

In some jurisdictions, bankruptcy has a direct effect on a case’s outcome. This is why it is very important for plaintiffs and defendants to understand how bankruptcy works when it comes to mass torts.  

What Is a Mass Tort? 

“Tort” is a legal term that refers to a negligent or wrongful act that results in injury to another party. So, a mass tort is a wrongful act committed by a corporation that affects a large group of people. When a corporation is guilty of a mass tort, the people who are injured by the company’s negligent behavior could be eligible for compensation. 

There are several reasons why a group of consumers is allowed to file a mass tort lawsuit, even if the defendant is experiencing bankruptcy. If consumers were harmed by defective products or have taken prescription or over-the-counter drugs that caused adverse effects, a mass tort case could be filed. 

Defective automobiles, oil spills, environmental disasters, and water pollution are also reasons for a mass tort lawsuit. Individuals who have been affected by man-made mass disasters, airplane crashes, or even pesticide poisoning from cleaning or gardening chemicals can take their personal injury case to court as a mass tort.  

Some of the most common mass court cases include asbestos cases. Asbestos exposure causes lung cancer, mesothelioma, and several other critical medical conditions. Most of the companies that created asbestos-contaminated materials have known that asbestos was dangerous since the 1920s. 

Many of those companies failed to warn or protect workers from asbestos, which is why those corporations have designated over $30 billion to pay for the damages caused by asbestos. The funds have also been designated to pay the family members of people who have died from mesothelioma and lung cancer due to asbestos exposure.  

The cigarette mass tort is another example of how several plaintiffs jointly took a case to court to recover damages. For decades, customers were misled by the tobacco industry about how dangerous and life-threatening smoking really is. 

So far, the four biggest tobacco companies in the U.S. agreed to pay $206 billion over the course of 25 years to survivors and state governments. The fund is used to cover Medicaid costs related to sicknesses and cancers that individuals developed because of smoking.  

What Attorneys Need to Understand About Mass Torts 

Some attorneys don’t understand how bankruptcy works in a mass tort case. Because of this, they are often failing to get the millions of dollars their clients are due. Additionally, experienced attorneys often don’t realize that they should keep taking on cases for injured consumers even when the defendant is a corporation involved in a pending bankruptcy or has had a recent bankruptcy. 

It is crucial for attorneys to educate themselves about mass torts to become familiar with the rules that are connected to mass tort bankruptcy litigation.  

Suppose you have a mass tort claim against a company that is about to file for bankruptcy. In that case, you could contact ASK LLP mass tort lawyers, a NY-based law firm with decades of joint experience in handling both mass torts and bankruptcy cases, for a free case evaluation to determine if your claim is worth fighting for even if the defendant has sought bankruptcy protection.

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