Washington, DC, June 25--Senators took a major step on Tuesday toward setting up a national fund to pay asbestos injury claims now clogging the courts as the Judiciary Committee agreed on the medical criteria for compensation.
Committee leaders hailed their vote as a breakthrough, and stocks of asbestos-related companies rose sharply as investors saw progress toward resolving litigation hanging over the businesses.
Asbestos was widely used for fireproofing and insulation until the 1970s, when scientists concluded that inhaled fibers could be linked to cancer and other diseases.
The proposed $108 billion compensation fund, which would be financed by the industry and insurers, would take hundreds of thousands of asbestos claims out of the courts. Injury claims have driven 67 companies into bankruptcy.
Still to be resolved are questions about how much money to pay victims in each of the 10 categories of lung scarring and cancer that were agreed upon, and how to keep the fund, which would operate for about a quarter-century, from running dry.
"I believe the toughest part was getting the medical criteria agreed to," Committee Chairman Orrin Hatch, the chief sponsor of the bill, said after the standards were approved on a voice vote.
Hatch, a Utah Republican, said the criteria would exclude from compensation many people who now sue because they have been exposed to asbestos.
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" to be appointed in the existing U.S. Court of Claims, instead of setting up a separate asbestos court as Hatch had proposed.
Hatch said the panel would meet again on Thursday in hopes of completing the bill and sending it to the Senate floor.
"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 Sen. Patrick Leahy of Vermont, the committee's ranking Democrat, who struck the deal on medical criteria with Hatch.
The agreement on medical standards pushed shares of companies with asbestos liabilities sharply higher in heavy trading. USG Corp., McDermott International Inc., Owens-Illinois Inc., W.R. Grace and Co. and Crown Holdings Inc. were among the top percentage gainers on the New York Stock Exchange.
The medical criteria approved by the committee included five levels of nonmalignant disease and five levels of cancer, such as 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 it contributed to the disease.
Labor representatives, who last month blasted Hatch's bill as a corporate bailout, said the medical criteria made it better. "It is definitely a major improvement," said Jonathan Hiatt, general counsel of the AFL-CIO.
But he said labor wanted other senators to increase the value of awards proposed by Hatch and create a mechanism to ensure the fund remains solvent. Hiatt said the awards in Hatch's bill, such as $750,000 for victims of mesothelioma, were "completely inadequate."
Big changes, however, could increase the $108 billion cost of the fund and risk losing the support of insurance and business representatives who have said they would finance it.
Hatch hopes the bill can be passed by the Senate within the next few weeks and move to the House of Representatives.
