Making money out of mould

January 22, 2002

Free Market Foundation

For plaintiffs’ lawyers, household mould could be the next asbestos. Some 10,000 lawsuits naming contractors and insurers are building up in the American courts. The common theme is that mould in their homes is making their clients sick causing everything from headaches and dizziness to neurological damage.

Mould is the visible growth of any of 100,000 species of fungus.

While certain types of mould contain a mycotoxin that can be fatal, such cases are extremely rare.

The Centre for Disease Control and Prevention has recanted an earlier report that implicated a type of mould in the bleeding lungs of eight Cleveland infants admitting that the study used unorthodox collection techniques and was flawed and now says that mould can cause allergic reactions, such as watery noses.

It also states that there is no proven link between mould and illnesses.

But the legal damage has already been done. Mould litigation has spread across the country. School districts in Illinois and Ohio have been hit by lawsuits from students claiming health problems. A Texas jury awarded $32.1 million to a Dallas executive although the insurance company involved is appealing.

Insurers estimate they paid out $670 million for mould-related property damage in Texas alone in 2001 more than double the total in 1999.

Source: Mary Ellen Egan, The Fungus that Ate Sacramento, Forbes, January 21, 2001.

For more on Class Action Lawsuits http://www.ncpa.org/iss/leg/

FMF Policy Bulletin\15 January 2002