Victims’ compensation needs to be reformed

Guest Columnist

  • Friday, October 3, 2008 3:04am
  • Opinion

When Congress returns to the other Washington after Labor Day, it needs to finish work on asbestos lawsuit reform. Before letting lawmakers off for their summer recess, Sen. Bill Frist, (R-TN), Majority Leader, said he wants to pass the legislation before Congress adjourns later this fall.

President Bush is right to insist that asbestos fairness legislation must happen, and soon, because people suffering from asbestos-related illnesses need doctors, not lawyers. Their compensation is jeopardized by a flood of asbestos claims brought on behalf of people who are not sick. Analysts estimate that a record 100,000 claims were filed in 2003, and the sheer volume of those claims makes it difficult to determine which are legitimate.

There is another problem for those who are sick. Even though defendant companies have paid out more than $48 billion in asbestos-related judgments, victims received only $29 billion of that. The rest went to their attorneys. In addition, the defendant companies paid out another $21 billion for their legal fees and insurance.

The RAND Institute for Civil Justice estimates that more than 730,000 people filed asbestos compensation claims over the last 30 years against some 8,400 companies. More than 70 of those companies have filed for bankruptcy, costing 60,000 jobs and $200 million in lost wages. Because of employer legal costs and judgments, the value of some employees’ 401(k) funds have shrunk 25 percent.

And there is no end in sight. The Asbestos Alliance estimates claims could continue for another 50 years, with total liability as high as $265 billion.

A bipartisan bill to create an asbestos compensation fund was approved by the Senate’s Judiciary Committee in May. It seeks to end time consuming and expensive lawsuits by creating a $140 billion no-fault trust fund. That fund, which would work much like our no-fault workers’ compensation system, would replace the current litigation-based system. The bulk of the costs would be borne by defendant companies and their insurers.

Whether Pennsylvania Republican Arlen Specter and Vermont Democrat Patrick Leahy have dialed in the right solution, it is clear Congress must act to stem the tide of lawsuits which are bankrupting companies and leaving many victims paralyzed by the courts.

Finally, state legislation is needed as well. So far Florida, Texas, Georgia and Ohio passed laws helping asbestos and silica victims. There are five major components of these statutes which our governor and state Legislature should address as well:

* Establish medical criteria requiring that all pending and future asbestos claimants show illness or impairment from asbestos exposure;

* Put an end to the practice of “bundling” thousands of claims together. Asbestos and silica claims would have to be tried separately and on their own merits;

* Ensure that the most seriously ill will receive expedited trials and adequate compensation for their injuries;

* Extend the two-year statute of limitations on filing asbestos lawsuits to protect the rights of those who may develop asbestos and silica related illness in the future; and,

* Shut down the “mass screening” of potential asbestos and silica claimants that has resulted in tens of thousands of unimpaired asbestos claims in the courts.

Don C. Brunell is president of the Association of Washington Business.

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