Washington, DC, November 4--Companies battling asbestos litigation felt optimistic on Wednesday that stalled legislation to limit corporate liability would be pushed through a Republican-controlled Congress after President George W. Bush's re-election.
Investors drove up shares of chemical and other firms faced with lawsuits from people sickened by asbestos, hoping that there would be quick resolution to the issue, which has cost companies billions in settlements and forced some into bankruptcy. Some stocks rose as much as 24 percent
Asbestos was widely used as building insulation until scientists found in the 1960s and 1970s that inhaled fibers could cause cancer and other diseases.
"With President Bush now re-elected and with an improved majority in the U.S. Senate the opportunity to pass meaningful civil justice reform ... is very strong," said Sherman Joyce, president of the Washington D.C-based American Tort Reform Association.
But opponents of the Republican effort on tort reform said opposition would continue.
"Republicans in Congress pursued an extreme agenda regarding tort reform -- so extreme that some other Republicans were not supportive," said Joanne Doroshow, Executive Director of Center for Justice and Democracy. "I don't see any reason whatsoever that the resolve that drove the Democrats to defeat those proposals in the last session has gone away."
"Our view is that tort reform is important not only for us but for the economy in general and it seems the election results would mean the chances and probability for meaningful tort reform will only improve," said Steven McCracken, Owens-Illinois' Chairman and CEO.
The Republicans appeared to increase their Senate majority to 55 seats, bringing them closer to the 60 needed to overcome opposing Democrat filibusters, or procedural hurdles.
Sen. Bill Frist, the Republican majority leader, and Democratic Sen. Tom Daschle, had worked for months on proposals for an asbestos compensation fund. But the measure had stalled in Congress recently.
The two leaders agreed on a sum of $140 billion as the overall size of the proposed fund, which would be privately financed. But they remained at odds over other issues, including how many of the hundreds of thousands of existing cases would be allowed to play out in court once the fund was established.
In October, Frist said he was not giving up on proposals to set up a special fund to compensate people who have been sickened by the fibrous mineral, while taking away their right to sue.
Daschle lost his bid for reelection in Tuesday's general election, so the status of the issue is up in the air.
But analysts cautioned that pro-business reforms would still face challenges from Democrats, led by Nevada Sen. Harry Reid, seen as the likely successor to Daschle, of South Dakota.
"(Reid) is going to be a very effective opposition leader," said Greg Kelly, asbestos analyst with Susquehanna Financial Group, an independent research firm for institutional investors. "While this has been very difficult under Daschle, it's not necessarily going to be any easier with Harry Reid as the new minority leader."
