Resolution of Mass Tort Claims in the Bankruptcy System
- Author(s): Douglas Smith
- Date Posted: April 2008
- Law & Economics #: 08-23
- Availability: Full text (most recent) on SSRN
This Article addresses the resolution of mass tort claims in bankruptcy, with a particular emphasis on one important mechanism available under the Bankruptcy Code, Section 157(b). Section 157(b) allows the district court presiding over a bankruptcy case to centralize all related claims for resolution within the bankruptcy proceedings. This is a particularly important procedural tool given the necessity of a centralized resolution of mass tort claims - one that has been increasingly utilized to resolve such claims on a global basis.
The Article discusses the essential aspects of mass tort litigation in the United States, the potential mechanisms for addressing mass tort liability as well as their shortcomings, the tools available within the bankruptcy system for resolution of mass tort claims, and the ability of bankruptcy courts to centralize all related claims for resolution in a single forum through litigation of common threshold issues of liability. The Article concludes that the bankruptcy system may succeed in efficiently and fairly resolving mass tort claims where other mechanisms have failed.