Yesterday, the North Carolina General Assembly took action to end the egregious abuses plaguing asbestos litigation by passing Senate Bill 470: Personal Injury Bankruptcy Trust Claims with good bipartisan support. This legislation will establish transparency and fairness in North Carolina’s costly civil liability and bankruptcy trust system, making North Carolina the 15th state in the nation to pass such reforms.

For far too long, bad acting personal injury attorneys have attempted to game North Carolina’s legal system by “double-dipping” damages and hiding evidence of exposure. From frivolous lawsuits to a weakened legal climate, there’s no question that the ramifications of these unethical practices on North Carolina’s business community are steep and we’re pleased the legislature has taken steps to mitigate them.

How exactly will this bill protect North Carolina’s legal system from this abuse? Well, Senate Bill 470 will amend Rule 26 of the North Carolina Rules of Civil Procedures regarding civil discovery in asbestos personal injury cases, requiring that bankruptcy trust claims be filed prior to trial instead of after. This commonsense change will make all claims materials admissible evidence in the civil action, giving juries full access to disclosures that are critical to conducting a fair trial and promoting honesty in both trust claiming and civil litigation. Not only will this legislation keep bad actors from manipulating the state’s legal system, but it will also expedite the receipt of trust payments to those injured by accelerating claim filings.

The strength of North Carolina’s competitive business climate is directly correlated to that of its legal climate. Just last year, North Carolina’s legal climate fell in the U.S. Chamber’s Institute for Legal Reform’s (ILR) rankings from one of the best in the nation to among the bottom half. The ranking’s analysis made clear that passing asbestos bankruptcy trust reforms could be integral in improving our state’s legal climate. This legislation is a step in the right direction to strengthen North Carolina’s legal climate – a necessity if the state is to continue attracting and retaining investment – as it creates a transparent and fair system in bankruptcy trust claims. It is our hope that this bill will become law.

Gary J. Salamido
Vice President, Government Affairs
NC Chamber

Subscribe for Updates