Mold cases could have a rotten effect

By Bill Summers
Mold-related cases are growing faster than spores on a month old pizza. Mold has been around forever, but the explosion in mold-related case is a far more recent development.

Why this sudden interest in the lowly mold spore? Perhaps it has something to do with a $32 million jury award to an Austin-area family in their suit against Farmers Insurance. This case catapulted “toxic mold” into the spotlight and a feature article in The New York Times magazine. The fact that the judge refused to consider health-related claims citing lack of scientific proof was downplayed in favor of photos featuring people in biohazard suits.

Not surprisingly, the lawsuit machine is already whirring into action. Plaintiff law firms across the country are forming “mold teams” to go prospecting for mold cases. Mold conferences are being organized and briefing materials and mold litigation kits are cropping up on resource web sites frequented by plaintiffs lawyers.

For now, personal injury lawyers have honed in on the deepest pockets, insurers, as their primary target. Why should we care? We should care because these lawsuits will come with a steep price tag for Texans.

According to the Insurance Information Institute, Texans already pay the highest homeowners insurance premiums in the country – a whopping $879 annually. Premiums are expected to increase even more as the cost of mold-related litigation and settlements are passed on to homeowners. In fact, we are already seeing the effects.

Our state's top insurance regulator said homeowners insurance rates could increase by 10 to 11 percent. Property insurers predict premiums could increase by as much as 80 percent for some policyholders. Allstate Insurance Co., the third-largest property insurer in Texas, has quit selling policies for homes with a recent water damage claim fearing mold growth. Some companies have also stopped selling any new policies because of concerns over water and mold-related claims. Other large insurers are scaling back coverage.

And this is only the first round. Why stop at insurance companies? With the potential for big paydays, lawyers will have ample incentive to expand the scope of their lawsuits and cast an even broader litigation net.

Who’s next? The homebuilder who constructed the home? The building material manufacturer who produced the materials for the home? The supplier who sold the building materials? The real estate agent who sold the home? The home inspector who failed to warn potential buyers that mold could occur?

Pick any one or any combination of these parties on the housing industry chain and the results will be the same – Texas homeowners and homebuyers will suffer. Texans will see housing prices climb, as the housing industry takes costly measures to protect itself from litigation or faces outrageous settlements and legal fees.

Seem far-fetched? It’s no more far-fetched than the current situation in which lawsuits and hundred thousand dollar claims are being filed when no science exists that proves mold causes health problems. That’s right, according to The Centers for Disease Control and Prevention “a causal link between the presence of the toxic mold and these conditions [unique or rare health conditions] has not been proven.”

But, as we’ve seen before, proof is not always a necessary component to litigation and creative new litigation has a way of outrunning the facts. Never is this more evident than when personal injury lawyers see a golden opportunity to mine an entire new cause of action.

It may be too much to ask of those who stand to mine mold for profit, but those of us who stand to lose should examine the facts and the implications before we allow mold litigation to proceed unheeded and unquestioned.

Let’s make sure we know what the problem is. While the effects of mold on an individual are unclear, the effects of mold-related cases on the rest of us are clear and well documented: We all pay.

Bill Summers is president and founder of the country's first Citizens Against Lawsuit Abuse group in the Rio Grande Valley of Texas.

Citizens Against Lawsuit Abuse

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