Washington, DC, January 10--President Bush on Friday urged Congress to pass federal legislation to resolve asbestos litigation that could end up costing U.S. companies $200 billion.
In a speech delivered in Michigan, the president said he is concerned with the number of U.S. companies that have gone bankrupt as a result of asbestos-related lawsuits.
Although the president has sought to rally attention in the past week to the issue, his speech did not offer a specific legislative remedy to a problem that has plagued lawmakers working on national legislation.
"While it is positive that the President continues to focus on tort reform and asbestos, we note that today's comments did not deviate from what has already been said and is known," a research note from Susquehanna Financial Group said.
Bush reiterated his desire to see Congress tackle the issue, and said certain principles should guide lawmakers as they craft a national plan. The president wants settlements to focus on people with medical problems stemming from asbestos.
More than 100,000 workers have died as a consequence of asbestos exposure, said Lester Brickman, a professor at the Benjamin N. Cardozo School of Law at Yeshiva University, speaking in Michigan with the president.
"But lawyers have taken this tragedy and turned it into an enormous moneymaking machine," Brickman said.
In 2003, 105,000 new claimants entered the asbestos litigation pool. But since each claimant sues between 40 and 70 companies, the cases generated between 50 million and 70 million new claims that year alone, Brickman said.
"Of this 105,000, approximately 10,000 are seriously ill, some dying, some dead, because of asbestos exposure," Brickman said.
The president said he also is concerned that as claims wipe out asbestos producers, lawyers will target companies once considered too small to sue or not directly involved with the manufacturing of asbestos.
"Because there's nobody else to sue, they try to drag in people that aren't directly involved with the manufacturing of asbestos," Bush said.
But groups remain torn over how to best deal with a crush of asbestos-related lawsuits that target more than 8,000 corporate defendants. Seventy companies have gone into bankruptcy from asbestos-related claims.
Exxon Mobil Corp., DuPont, Federal-Mogul Corp., and five other companies last month formed a group to promote a "medical criteria" approach instead of a global settlement envisioned by federal trust fund advocates, according to a research note from Prudential Equity Group.
"The best solution to the asbestos problem lies in establishment of a national, no-fault trust fund, privately financed by asbestos defendant companies and insurers," said Mike Baroody, executive vicepresident of the National Association of Manufacturers, in a statement on Friday.
Texas-based oil-services giant Halliburton Co. announced Monday that it had resolved its asbestos liabilities and that two of its subsidiaries can now exit bankruptcy protection.
Incoming Senate Judiciary Committee Chairman Arlen Specter, R-Pa., has already circulated a draft proposal for an asbestos trust fund bill and plans to hold a hearing on the proposal Jan. 11, setting the stage for a renewed push to reach a resolution.
Senate Majority Leader Bill Frist, R-Tenn., failed last spring to get the 60 votes needed to bring an asbestos bill to the Senate floor for debate. Democrats balked at the size of the proposed $124 billion fund, saying the award values would not adequately compensate sick workers.
