Asbestos Bill Reintroduced in House

Washington, DC, March 24--The Fairness in Asbestos Injury Resolution Act just keeps coming back from the dead. According to the BestWire Services, the FAIR Act's latest resurrection comes in the form of a House bill, H.R. 1360, introduced by Rep. Mark Kirk, R-Ill. A proposal to create a privately funded, publicly administered trust fund that would compensate both present and future victims of asbestos exposure, the bill had stalled in several recent Congressional sessions as negotiators for insurers, manufacturers, trial attorneys and labor groups failed to find common ground for compromise. According to Kirk, the latest draft of the bill builds upon terms agreed to last year by Senate Majority Leader Bill Frist, R-Tenn., and then-Minority Leader Tom Daschle, D-S.D., in which the insurance industry would pay $46 billion over the 27.5-year life of the $140 billion victims' compensation fund. Though asbestos exposure largely ended in the 1970s, a February 2004 study by Rand Corp. found that companies have paid out $70 billion for asbestos claims since then, with 74 companies driven into bankruptcy by asbestos-related litigation, making it by far the most expensive category of litigation in U.S. history. According to Rand and consultant Tillinghast-Towers Perrin, a record 100,000 asbestos-related lawsuits were filed in 2003, and there are about 600,000 claims pending in total. Nonetheless, all of the 21 attempts to pass various sorts of asbestos legislation through Congress since 1970 have failed. Under terms of the bill, an Office of Asbestos Disease Compensation would be created within the U.S. Department of Labor and charged with administering the fund. The bill calls for establishment of a series of medical criteria and a compensation schedule for claimants seeking to prove that they suffer from eligible diseases or conditions related to asbestos exposure. Claims would need to be filed within four years of receiving a medical diagnosis, and the trust fund administrator would have 90 days to rule on the validity of a claim. "Litigation reformers like Congressman Henry Hyde, R-Ill., laid the foundation for the current negotiations with the Senate that could produce legislation to compensate the sick while allowing other defendants to move beyond the decades-long uncertainty of the current system," Kirk said during a floor statement to introduce his legislation. "With reform, we will help people battling asbestos illness. We will also lift a dark cloud that sits over hundreds of companies trapped in the asbestos litigation abyss." Dennis Kelly, a spokesman for the American Insurance Association, said that while the AIA appreciates Kirk's "continued recognition of the problem and his willingness to explore solutions," the group still is reviewing the proposal and couldn't yet take a position on the measure as drafted. A similar proposal to create a $140 billion trust fund was floated as a "discussion draft" earlier this year by the Senate Judiciary Committee's chairman, Arlen Specter, R-Pa., but it has yet to be introduced formally in this session. While groups such as the AIA, the National Association of Mutual Insurance Companies, the Property Casualty Insurers Association of America and the Reinsurance Association of America took part in the negotiations that led to the version supported by Frist in the 108th Congress, the trade associations have expressed significant concerns about provisions included in Specter's version of the bill, which they say leave the door open for a return to the tort system. "It should be wholly unacceptable from a public policy standpoint to craft as a fallback, if one is necessary, a return to the same litigation system that has created the problem in the first place," noted Craig Berrington, senior vice president and general counsel of the AIA, in January testimony before the Senate Judiciary Committee.

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