April 22 (Bloomberg) -- Lincoln Electric Holdings Inc., the world's largest welding-equipment maker, has escaped the fate of tobacco and asbestos producers by scoring upset victories over trial lawyers claiming its products caused symptoms resembling Parkinson's disease.

Workers' attorneys won only 3 of 15,000 cases filed this decade after predicting litigation would bankrupt the industry. New suits against 12 welding-products makers fell from 9,510 in 2003 to 57 last year, said John Beisner, a lawyer for the companies. Lincoln was named in most of the cases.

The industry, with $20 billion in annual sales, faced as much as $70 billion in damages in 70,000 suits, the financial services company HSBC Holdings Inc. said in 2003. Cleveland-based Lincoln, with $2.28 billion in 2007 revenue and a 30 percent U.S. market share, refused to settle cases. It coordinated defenses with the 11 other makers including units of Illinois Tool Works Inc. and Allegheny Technologies Inc.

``Plaintiffs' lawyers are always looking for the next asbestos or the next tobacco,'' said Lincoln shareholder John R. Dorfman, 61, chairman of Boston's Thunderstorm Capital, who increased his stake by one-third to 45,600 shares in the last quarter of 2007. ``But the trend has been for the company.''

The tobacco industry agreed to pay more than $246 billion to settle states' lawsuits, and asbestos litigation drove more than 70 companies into bankruptcy.

Lawsuits' Effect

Institutional investors have shied away from Lincoln because of litigation, said analyst Elliot Leo Schlang of Soleil/Great Lakes Review in Cleveland. About 2,800 cases are pending.

Schlang said the shares may climb 55 percent to $115 in a year. With only nine analysts following the stock, Schlang said, Lincoln is ``undercovered by the street.'' He owns shares and recommends buying them.

Forecasts of rising revenue from storm-related reconstruction pushed Lincoln shares up 30 percent since a 16- month low on Jan. 17. ``They're the leading factor in the world'' as demand grows for welding equipment and supplies like rods and wires consumed in the process, Schlang said.

Lincoln fell 19 cents to $74.21 at 4 p.m. in Nasdaq Stock Market trading after reaching a five-month high yesterday. Among analysts surveyed by Bloomberg, six say ``buy'' and three advise holding.

Workers started suing in the 1970s, claiming manganese fumes from heated rods and wires gave them tremors resembling Parkinson's disease.

Ads, Screening

The number of cases rose after lawyers including tobacco litigators Richard Scruggs and Don Barrett began advertising for welders as clients and conducted ``cursory'' medical screenings of more than 10,000, Beisner, 55, of Los Angeles-based O'Melveny & Myers, said in an interview.

The lawyers told equipment makers in 2003 they could escape the fate of companies sued over asbestos by settling before being taken to court, Beisner said.

``The industry declined,'' he said.

Barrett, of Lexington, Mississippi, recalled ``many'' meetings and quoted industry representatives as saying they'd never lost a trial.

``What we said was, in asbestos the plaintiffs lost the first 10, 15 cases, then they learned how to win them,'' he said.

Scruggs didn't return calls for comment. He pleaded guilty last month to bribing a judge over an unrelated case.

A worker won the first welding-rod jury award, for $1 million, in October 2003. More than 10,000 new suits were filed that year and the next, Beisner said.

Many Targets

``When you have an entire occupation as a plaintiff pool, it's hard to escape the conclusion that the potential exposure was very high,'' Beisner said. Companies won't disclose their risk calculations, he said.

The equipment makers aggressively investigated plaintiffs. One suit was dropped after a video showed a supposedly disabled worker walking and doing yard work, said industry attorney Steve Harburg, also of O'Melveny.

In a 2006 Cleveland trial, welder Ernesto Solis, 57, claimed he was never warned manganese fumes might cause neurological problems such as hand tremors.

The company won after a lawyer read a warning from Solis's junior-college welding textbook against working in unventilated places. The teacher testified he taught that fumes were poisonous, according to a transcript.

Twenty-three cases have been tried, with companies winning 20. Lincoln lost an appeal of the $1 million verdict and is appealing the other two, for $20.5 million and $2.9 million.

Legal Expenses

Lincoln's welding-suit expenses rose $8 million in 2006, then dropped $10 million last year, said Brandy Bergman, a spokeswoman for the industry with the New York public relations firm Sard Verbinnen & Co. Lincoln doesn't disclose the costs, she said.

Defending claims cut the company's 2006 gross margin by about 0.4 percent, or $7.5 million, Chief Financial Officer Vince Petrella, 47, told analysts last year.

Workers' attorneys are withdrawing some cases, said Brian Barr of Levin Papantonio in Pensacola, Florida, representing welders in more than 150 suits. ``We've looked at what the juries have said, have adapted and figured out what a real case is,'' he said.

Welders will win future cases, said David Shelton of the Scruggs Law Firm in Oxford, Mississippi, winner of December's $20.5 million award and the one in February for $2.9 million. ``We're not saying the plaintiffs will win every one, but we've caught up with the industry on knowledge of the health risks,'' he said.

Analyst James Bank of Sidoti & Co. LLC in New York said the industry threat has been eliminated even with two recent losses. He rates Lincoln Electric shares ``buy'' and owns none.

``Three people winning, and it took six years to do it,'' he said. ``It's not material.''

To contact the reporter on this story: Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net.

Last Updated: April 22, 2008 16:18 EDT