U.S. Senate Committee Passes Asbestos Liability Bill

Published July 1, 2005

Asbestos litigation that has sent more than 70 corporations into bankruptcy and has clogged the courts with more than 700,000 civil claims would be a thing of the past under a bill approved on May 26 by the U.S. Senate Judiciary Committee in a 13-5 vote.

Under the proposed legislation, a $140 billion trust fund paid for by insurance companies and asbestos-related industries would compensate victims based on their degree of physical impairment.

The fund would make payments only to persons actually diagnosed with an asbestos-related health impairment. Payments would range from $25,000 for minor breathing impairments to $1.1 million for lung cancer. Attorneys fees would be capped at 5 percent of the total award.

Majority of Money Bypasses Victims

According to a May 2005 study released by the RAND Institute for Civil Justice, more than 730,000 people have filed asbestos claims in the United States, and many more cases likely will be filed in the future. According to the study, the courts are finding it difficult to keep up with the cases.

Moreover, reported the RAND study, asbestos victims received only 42 cents of every dollar spent on asbestos litigation. Plaintiffs’ lawyers receive 27 cents, and defense costs account for the remaining 31 cents.

The bill was cosponsored by Patrick Leahy (D-Vermont) and Arlen Specter (R-Pennsylvania). It has attract both support and opposition from both sides of the aisle.

Several liberal Democrats, including Russ Feingold of Wisconsin, Edward Kennedy of Massachusetts, Charles Schumer of New York, and Richard Durbin of Illinois, oppose the measure because it moves asbestos-related claims out of the courts. The four would prefer to allow even persons with have no identifiable asbestos-related injuries to file civil lawsuits.

On the other side of the aisle, many conservative Republicans consider the $140 billion compensation pool too large. Some senators from both parties, moreover, support the idea of a compensation pool but oppose some of the logistics of this particular plan.

“We have always realized that passing a bill of this scope and complexity is the legislative equivalent of steering a ship through a minefield during a hurricane,” Leahy said, according to the May 27 Detroit News. “This solid and bipartisan committee endorsement will help generate the momentum that will be needed to navigate through the difficult steps that still lie ahead.”

“We will do our best to make further accommodations and improve the bill,” vowed Specter, according to the News.

“We think it has a real shot [of gaining Senate approval],” said Orrin Hatch (R-Utah), according to CBS News, “but there’s still going to have to be a lot of work in it.”

“Everybody wants a little more, but the final vote will turn on whether the bill is better than the current system,” CBS News reported Specter as saying.

Analysts Praise Bill

“In approving the asbestos trust fund legislation, the Senate Judiciary Committee has taken a huge step towards injecting sanity and justice into the process of compensating asbestos victims,” said Ken Boehm, chairman of the National Legal and Policy Center.

“If passed by Congress, this legislation would end the circus of runaway asbestos litigation that has amply rewarded a handful of lawyers while leaving thousands of desperately sick people with a fraction of the compensation they deserve,” added Boehm. “It is nothing short of a national scandal that unscrupulous lawyers have clogged the courts with over 730,000 asbestos claims, 90 percent of them on behalf of claimants who have no asbestos-related health problems. Meanwhile, justice is delayed and denied for truly ill people, some of whom have died waiting for their day in court.”

“The NAM [National Association of Manufacturers] urges Senate leadership to advance this bill expeditiously toward floor debate and a final vote,” said NAM President John Engler in a May 26 news release. “For the sake of our economy, and in the spirit of compromise, special interests must now yield to our shared national interest.”

Engler continued, “If lawmakers want to be taken seriously by manufacturers and their employees when professing their desire to spur economic growth, and if they want to reduce the gigantic backlog of specious asbestos lawsuits that clog our courts and delay justice for the victims who are truly sick, then they should move this bill without further delay.”

Trial Lawyers Object

“This bill is about as far from perfect as you can get,” Todd Smith, president of the American Trial Lawyers Association, told the May 27 Washington Times. “It’s underfunded, unfair, unworkable, and likely unconstitutional.”

“People should not be able to sue based on mere speculative future harm that may never occur,” countered Sterling Burnett, a senior fellow at the National Center for Policy Analysis. “You have to actually show that somebody caused you harm. The tradeoff regarding limitations is rational and a good thing. “A car might hit me crossing the street tomorrow,” he continued. “But I can’t sue auto manufacturers or fellow drivers based on such mere speculation.”

James M. Taylor ([email protected]) is managing editor of Environment & Climate News.

For more information …

The RAND Corporation’s May 2005 report, “Asbestos Litigation,” is available online at http://www.rand.org/publications/MG/MG162/.