NYT: (Plaintiffs') Lawyers Challenged on Asbestos (by federal prosecutors)

Lawyers Challenged on Asbestos
By JONATHAN D. GLATER
Published: July 20, 2005


Plaintiffs' lawyers, long accustomed to public criticism and lawmakers' wrath, now face a new and more dangerous adversary in federal prosecutors.

The latest evidence that the government may be increasingly willing to pursue these lawyers comes in the bankruptcy of a company overwhelmed by asbestos claims. Recently filed court documents show that federal prosecutors in Manhattan may have begun to investigate the conduct of three law firms.

The documents - which surfaced in the bankruptcy case of G-1 Holdings, formerly the GAF Corporation, a manufacturer of roofing material - show that lawyers for G-1 have met with prosecutors from the United States attorney's office in Manhattan in recent months. The documents also show that the company's lawyers have turned over records of extensive interviews with former employees of the three plaintiffs' firms in which some employees described coaching potential claimants and noted efforts to influence doctors' diagnoses.

The investigation is potentially explosive because asbestos litigation has been a hugely costly problem for companies and an almost inconceivably profitable business for plaintiffs' lawyers. About 730,000 people have filed claims for asbestos-related injuries, costing a total of $70 billion as of 2002, according to the RAND Corporation, which estimates that a little less than a third of the total went to plaintiffs' lawyers. And since 1976, asbestos liability has contributed to the bankruptcy of more than 70 companies, including Bethlehem Steel, Owens Corning and W. R. Grace....

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The current criminal investigation is the latest example of a new willingness by prosecutors to look into the conduct of plaintiffs' lawyers. Last month, the United States attorney's office in Los Angeles announced the first indictments related to a three-year-old investigation of Milberg Weiss Bershad & Schulman, a law firm known for its frequent shareholder class-action lawsuits....


http://www.nytimes.com/2005/07/20/business/20asbestos.html