Medical Criteria Set for Asbestos Claims

Published July 7, 2003

In June, the Senate Judiciary Committee reached agreement on language describing the medical criteria that would be used to evaluate asbestos injury claims submitted to a proposed national compensation fund. Compensation claims have been backing up in the court system for years; the fund has been proposed as a way to resolve claims more quickly.

As committee leaders announced the vote, the stocks of asbestos-related companies rose sharply, evidence investors considered the vote a positive step toward resolving litigation hanging over the asbestos industry.

Asbestos was widely used for fireproofing and insulation until the 1970s, when scientists concluded inhaled fibers could be linked to such illnesses as cancer and pulmonary disease.

The proposed $108 billion compensation fund, to be financed by industry and insurers, would resolve hundreds of thousands of asbestos claims. Some 67 companies already have been driven into bankruptcy by claims both legitimate and spurious.

More than 200,000 asbestos tort claims are pending nationwide against more than 1,000 corporations. Many of the defendant companies never made asbestos products. Though most of the plaintiffs show no evidence of illness or other physical harm from asbestos exposure, some are being awarded large judgments based on what critics say is highly speculative future harm, suspect science, and juries’ preconceived notions about asbestos.

Criteria Established

The medical criteria approved by the committee includes five levels of nonmalignant disease and five levels of cancer, including lung cancer and mesothelioma. Colorectal cancers and cancers of the throat and stomach could also qualify for compensation if the victim can show 15 years of occupational exposure to asbestos and medical documentation that the exposure contributed to the disease.

The criteria were developed during a June 26 markup session for S. 1125, the Fairness in Asbestos Injury Resolution Act of 2003. Introduced in May by Senate Judiciary Committee Chairman Orrin G. Hatch (R-Utah), the measure currently has seven cosponsors and remains pending in the committee.

Labor representatives, who as recently as May blasted Hatch’s bill as a corporate bailout, now support it. Jonathan Hiatt, general counsel of the AFL-CIO said the amended measure “is definitely a major improvement.”

Hatch agreed good progress was being made. “I believe the toughest part was getting the medical criteria approved on a voice vote,” he said. He explained the agreed-upon criteria would exclude from compensation many people who now sue simply because they have been exposed to asbestos, regardless of whether that exposure has had any documented effect on their health.

“Emergency room physicians are trained to ‘triage’ their patients according to the severity of their injuries and illnesses,” noted Tom Miller, director of health policy studies for the Cato Institute. “We’ve reached that point long ago in the litigation lottery for asbestos claims that are real, minor, and imaginary. Future compensation must be based on the severity of medical distress.”

The committee also voted to include in the bill a ban on the use of asbestos, with some exceptions. And it agreed the injury claims would be heard by 20 special “asbestos masters,” who would be appointed to work through the existing U.S. Court of Claims, instead of setting up a separate asbestos court as Hatch originally proposed.

Issues Remain

“We got one of the three biggest issues done, and if we can follow the same thing, we can probably get the next two,” said Senator Patrick Leahy (D-Vermont). It was Leahy who negotiated the agreement on medical criteria with Hatch.

As Leahy noted, two major issues remain to be resolved. Committee members have yet to determine how much money should be paid to victims in each of the agreed-upon 10 categories of lung scarring and cancer, and they also must consider ways to keep the fund from going bankrupt. The committee must tread lightly, as any major changes to the bill could increase its $108 billion price tag and risk losing the support of insurance and business representatives who have said they would finance it.

“Capping the maximum amount of money in the fund,” noted Cato’s Miller, “is inextricably linked to determining how much money to pay victims in various categories and to keeping the fund from becoming insolvent, so the problem is not kicked over to general taxpayers.”

Hatch said the committee would meet once more to complete the bill before sending it to the Senate floor.

Conrad F. Meier is managing editor of Health Care News. His email address is [email protected].

For further information, contact Heartland Public Affairs Director Greg Lackner at 312/377-4000, 773/489-6447, email [email protected].