Wednesday, December 8, 2010

Who's Watching Out For The Consumer?

Health News Digest contributing columnist Michael D. Shaw takes a hard look at two highly touted Chinese drywall settlements in his latest column, and explains why the deals are so bad for the plaintiffs, and how they got that way. The cases in question are the so-called Lowe's and Knauf settlements.

In its first iteration, the Lowe's settlement offered, at best, a measly $4500 in cash and gift cards, despite the fact that a typical Chinese drywall remediation job costs around $100,000.

The Knauf deal is actually a demonstration project for the remediation of 300 homes. However, many important details of the remediation process are not being publicized, and absent exceptional circumstances, the homeowner is barred from his own property during the remediation. Furthermore, there is no guarantee.

"That can't be good," Shaw points out. "Besides, we hear that very few homes have been completed--or even started--under this project. Maybe the owners are getting cold feet, given all the unanswered questions."

These less-than-stellar settlements are under a permanent cloud since the plaintiff's attorneys cut their own fee deal with the defendants on the side. Technically, this is legal, if it is disclosed and agreed to by the plaintiffs. Assuming that no fraud was involved, this sort of thing will pass legal, if not ethical or moral muster.

It took strong public outcry to get Lowe's to up the ante on its settlement, and perhaps continuing scrutiny will force Knauf to follow suit.

Shaw does give full marks to Florida's measure HB 965, which requires appraisers to reduce the assessed values of single-family homes with tainted drywall. "As such, this could present a huge challenge to jurisdictions such as Lee County, that have thousands of affected homes," he notes.

Shaw urges affected homeowners to learn all the facts, and to carefully evaluate any attorney or supposed "expert," who promises them a sweet deal.