ASBESTOS LEGISLATIONPanacea or Pariah?
CHICAGO (Sept. 13, 2005) - The future of asbestos litigation reform (S.852) will soon be at hand.
The Asbestos Disease Awareness Organization (ADAO) and other groups have assembled information for public and political education and awareness regarding asbestos. According to ADAO, asbestos can cause respiratory disease, cancer and death. It kills more than 10,000 Americans per year, or expressed another way, one in every 125 male deaths annually. Furthermore, asbestos has not been banned, just regulated. It isn't just working America that is at risk. According to the organization, the collapse of the World Trade Center released hundreds of tons of pulverized asbestos dust into the air. For those interested, a short slideshow outlining the impact can be viewed by clicking here.
http://adao.corefusion.net.
The asbestos issue has been under consideration by Congress for decades. Asbestos-related litigation claims increased steadily, but then skyrocketed in the late 1990s. Among the key issues under consideration by Congress are:
1) Defining the extent and urgency of the problem of asbestos exposure and litigation today.
2) Ensuring the speed of and fairness of compensation for legitimate victims.
3) Excluding claims that do not meet specific medical criteria.
4) Providing certainty to defendants and their insurers to minimize adverse job, pension, and economic impacts, freeing the backlogged court system, and preventing future asbestos exposure.
Co-sponsored by Senator Patrick Leahy (D-VT) and Senator Arlen Specter (R-PA), the Fairness in Asbestos Injury Resolution Act (FAIR) would create a $140 billon trust fund to compensate people sickened by asbestos exposure. Companies with $1 million or more in total asbestos payments through the end of 2002 are subject to FAIR's trust fund provisions.
The FAIR act was introduced by its sponsors on April 19, 2005. Several meetings were held by the Senate Judiciary Committee (SJC) through to May 26, 2005, at which point the SJC held a roll call vote of 13 yeas and five nays. The Committee then filed its final report with the Senate on June 30, 2005.
Last week, Senator Specter issued a statement wherein he said he expected the Senate vote to be held in early October.
But the legislation is not without controversy and faces opposition from businesses, insurance companies and surprisingly, many asbestos victims' organizations, health care specialists and consumer action groups.
Footing the bill The Coalition for Asbestos Reform (CAR) is a group of small- and medium-sized businesses and their insurance companies committed to educating U.S. businesses and policymakers. CAR feels that S. 852 contains serious flaws. The coalition mobilized in June of 2005 to launch a major national campaign to explain the effect of the Specter/Leahy bill on hundreds of local businesses that face potential asbestos liability, many of whom are unaware of the $140 billion in new taxes that FAIR authorizes to finance the trust fund mandated by the bill.Thomas O'Brien, chairman of CAR, said that small- to medium-sized companies don't have the budgets to afford the lobbyists that the big companies have and that they are just trying to stay afloat and keep people employed. He said that smaller firms are going to pay a higher disproportionate share of the cost for this "disastrous" legislation. "The Specter/Leahy bill will create greater uncertainty for everyone except the few big companies who would be allowed to escape the billions of dollars in costs for which they are responsible," he said.
CAR notes that the final SJC report to the Senate included "additional views" from seven of the 13 senators who had voted in favor at the committee level. The reservations expressed by senators in those views included concerns for the fairness in funding from affected companies, the predictability of claims, that the funding assessments to companies effectively constitutes a business tax, the ethics of pre-empting litigation and possible impact on American taxpayers should the trust fund collapse.
CAR says that the allocation strategy that determines the tax burden of companies that will contribute to the trust fund was designed in secret by a handful of large Fortune 100 companies. They maintain that the strategy shifts much of the financial burden of the trust fund from the largest companies with the greatest resources and current exposure to possible liability and asbestos litigation, to smaller companies - many of which will not survive the new tax. Essentially, the smaller companies will be required to contribute a much larger relative portion of their revenue to the trust fund than the larger, more profitable companies.
CAR fears that hundreds of small- to medium-sized employers will be forced into bankruptcy. Large companies - which ran out of insurance coverage long ago - benefit by provisions in the legislation that cap lawsuit payouts and limit their financial responsibility to asbestos victims. For smaller companies, the story is much different: FAIR would cancel the insurance coverage they have (which was bought and paid for), leaving them with a new multibillion dollar tab in the form of funding assessments. CAR provides an online cost calculator to help business estimate their costs at http://www.asbestosreform.org/calculator.aspx.
Victims' and consumer groups also criticize the proposed legislation. Sponors say the FAIR legislation was designed to benefit asbestos victims. Yet it has drawn concerns from a wide range of asbestos victims groups. Issues center on whether the right companies will fund the program in proportion to their responsibility and the elimination of the right to litigate in the court system.
The public speaks In June 2005, the Asbestos Victims Coalition was formed to ensure that the voice of asbestos victims is fairly represented and to raise awareness about the inequities in the proposed FAIR act. The organization is comprised of consumer groups, victims' organizations and medical and research specialists working together. Specifically, the coalition is working to promote understanding of asbestos' impact and the shortcomings it sees in the proposed legislation.According to Matt Kibbe, president of FreedomWorks, "Instead of fixing the problem, the Specter/Leahy Trust Fund approach abandons our court system in favor of a bureaucratic, tax-and-spend process."
ADAO director and co-founder Linda Reinstein expressed concern that the bill shifts the exposure and financial responsibility from those responsible and prevents fair legal action by those affected. "We're not ready to give up on the American legal system," she said.
"This asbestos bill is corporate welfare at its worst," said Jillian Aldebron, civil justice counsel for Public Citizen's Congress Watch. "It is designed to protect the companies most egregiously responsible for the asbestos crisis from paying their fair share. It fails hundreds of thousands of victims of asbestos exposure and their families, and it fails all who believe in a just and fair society."
Who should pay and how much liability is central to a fair resolution. It is clear that advocacy groups vary in their opinions on those questions. But victims' groups, consumer organizations and the small- and medium-sized businesses in CAR do agree on one thing: The companies supporting the Specter/Leahy bill are among the biggest businesses in America. They say that these companies have billions of dollars riding on the bill's passage and that deep pockets have allowed the companies to help write the legislation and minimize their negative consequences.
(Sources: U.S. Senate, CAR, ADAO)
