Senate Committee Promotes Trust Fund as Solution to Asbestos Claims
July 7, 2008 - 7:29 PM
(CNSNews.com) - With insurers and corporate defendants desperate to resolve costly asbestos lawsuits before the politics of the 2004 presidential year intervenes, the Senate Judiciary Committee on Tuesday pressed forward with a bill to resolve the estimated 200,000 asbestos cases clogging the nation's courts.
The plan, originally penned by committee Chairman Orrin Hatch (R-Utah) but amended by the committee on Tuesday, would replace lawsuits with a national $180 billion trust fund paid for by insurers and corporate defendants and regulated by the federal government.
The bill would also set medical criteria for determining who is eligible to receive trust fund money as compensation for asbestos-related exposure and injuries.
"There are 600,000 plaintiffs right now, there are 8,400 companies involved, and the costs are just going through the roof," said Dave Warner, a spokesman for the U.S. Chamber of Commerce's Institute for Legal Reform.
Companies have already paid some $54 billion in asbestos claims and related costs, yet claimants get only 43 cents of every dollar spent on asbestos litigation, according to the Asbestos Alliance. Absent legislative intervention, the consulting and actuarial firm Milliman projects that the total cost of settlements could reach $265 billion.
Asbestos, a mineral that crystallizes as long thin fibers, was used in many types of buildings during the 20th century as an insulator and fire retardant. But exposure to the carcinogen caused - decades later - several types of diseases, including asbestosis (scarring of the lung tissue), mesothelioma (cancer of the pleural lining) and lung cancer.
In the early 1970s, the federal government placed a moratorium on the production of some types of asbestos products, but it was still used for another decade.
The legal liability surrounding asbestos exposure has divided not only in court, but also among interests on both sides of the asbestos issue. Insurance companies disagree over their respective liability regarding the proposed trust fund. And lawyers who represent different types of plaintiffs disagree over how much should be allotted to victims with different diseases and workers who were exposed to asbestos but are not (yet) sick. Organized labor, meanwhile, has been pressing for a national trust fund to assure compensation for its members.
Sen. Patrick Leahy, ranking Democrat on the Judiciary Committee, has expressed concern about the trust fund running out of money too soon. "The money cannot simply dry up and victims be left holding the bag,'' Leahy told news sources.
Fred Baron, a leading asbestos trial lawyer, remains critical of the trust fund bill.
"A lot of people who have very legitimate asbestos claims will be denied benefits under the criteria they just adopted today," Baron charged.
"It was very remarkable that they've reached an agreement now on the criteria," said Baron. But "the real rubber meets the road on whether or not there'll be an agreement reached on the dollars" allocated to the fund.
"My guess is that that's going to take quite a while to get through [because] there are numerous other issues that have to be agreed to before this bill has any weight to it," said Baron.
"There's a tremendous amount of work that needs to be done," agreed Debra Ballen, executive vice president of the American Insurance Association.
But "there was a real commitment by the senators to get it done," Ballen said.
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