The Law Firm of Motley Rice LLC - Asbestos Bill Update

2004 was an active year as several proposed asbestos bills were discussed. The recent November 2004 elections will likely influence the direction this legislative activity heads. The old proposals may re-emerge or be replaced with new ones. As you know, the Hatch Bill was defeated this year. From this defeat came a proposal to create a $140 billion trust fund for asbestos-related injuries. In response to Frist's bill, Minority Leader Thomas Daschle proposed to create a trust fund valued at $145 billion. Both funding schemes would include $4 billion in assets from existing trust funds that would be absorbed into the new trust fund. The Frist plan is $5 billion less than the figure in Daschle's offer in June and closely follows a recommendation generated recently by groups representing the businesses that would foot most of the bill. Both the Daschle and Frist proposals also rely on funding schemes that would include $4 billion in assets from existing trust funds that would be absorbed into the new trust fund.

On the afternoon of July 20, 2004, Senator Frist gave Daschle a counter-offer and basically said take it or leave it. In late summer 2004, the two sides were still far apart on a lot of issues and neither side would budge.

In response to these proposals, Peg Seminario, the AFL-CIO's director of occupational safety and health, indicated $136 billion would be "insufficient." The AFL-CIO has said $149 billion is the minimum size of the fund required to adequately pay claimants and rejected Daschle's proposal as well. Ms. Seminario stated the federation had not been formally notified of the recent discussions regarding a trust fund. However, she said, labor continues to believe that victims of asbestos exposure could not be adequately compensated unless an asbestos trust fund is valued at $149 billion with at least $60 billion guaranteed in the first five years.

Draft legislation that aimed to bridge the gap between competing Senate plans for a U.S. asbestos compensation fund was being circulated by California Democrat Senator Dianne Feinstein. The bill assumes a fund of $140 billion to $144 billion, depending on whether existing compensation trusts are brought into the plan. In the recent proposals, pending asbestos injury suits would be taken out of the courts and into the new scheme unless a verdict has already been reached or the victim has entered an enforceable settlement.

Daschle proposed allowing asbestos cases for which a trial date has been set to proceed in court. Frist, however, wanted existing claims to revert to the new fund, except in cases where there is a final court judgment--saying businesses and insurers are not willing to fund a compensation trust while suits can still be filed in court. Under the Feinstein proposal, victims could revert to the court system at any time the fund administrator certifies the trust has run out of money. According to the Feinstein bill, if the fund fails to get going within 90 days, the sickest asbestos victims could return to the court system until the fund becomes operational. There would also be an expedited handling of claims by the fund of the most serious, terminally ill patients.

With Daschle's defeat, and several other changes in Congress, the fate of the legal rights of asbestos victims is largely unknown. The AFL-CIO, the victims, and their advocates will certainly have to be diligent in their efforts to obtain fair compensation. Motley Rice LLC will be actively monitoring this issue.