News Coverage
America's asbestos crisis
Published April 17, 2004
Asbestos lawsuits are costing American companies a mint. The Rand Corp., a noted think tank, puts the price tag at $70 billion to date -- an amount that's growing rapidly. The litigation has driven 66 firms into bankruptcy -- a figure that's also rising. Now, Senate Majority Leader Bill Frist (R-Tenn.) has come up with a variation on a previous proposal to end the lawsuits and to set up an administrative fund with which to pay asbestos victims instead. The problem is that Frist's supposedly better idea is worse than the original.
Asbestos, of course, doesn't take a toll only on companies. Since 1979, more than 43,000 people have died from exposure to the product, and that figure is climbing at the rate of 10,000 a year, according to a recent study by the Environmental Working Group Action Fund, which monitors threats to health and the environment.
Asbestos is as deadly as it was popular. The crystalline, fibrous, fire-retarding material found its way into thousands of industrial and consumer products, including insulation, flooring, roofing, construction material and hair dryers.
The fine fibers of this naturally occurring mineral also found their way inside human bodies, where they damaged lungs, causing cancer and other ailments. Millions of American workers have been vulnerable. Complicating matters is that it could take from 20 to 50 years for symptoms to show.
The asbestos crisis is so huge that an administrative fund does make sense, but not in the way Frist and the bill's co-sponsor, Sen. Orrin Hatch (R-Utah), are proposing. One problem with litigation is that it could bankrupt firms, meaning victims could get pennies on the dollar. The multiplicity of lawsuits may lead to unfairness in allocating the compensation, meaning one victim may get less money than another victim who isn't injured as badly. Finally, a much bigger portion of an administrative fund would go to actual victims than would a lawsuit settlement, in which lawyers get huge chunks of the money.
But the size of the fund the new bill is proposing, $124 billion, is likely too small to handle expected claims -- a concern shared by some Republicans, who fear the federal government would have to make up the difference, as well as Democrats, who fear victims won't get just compensation. The bill calls for the money to come from insurers and companies with asbestos liability.
The bill has a host of other problems, centering on fairness to victims. The main mistake the authors made was to present a partisan bill even though negotiations were under way for a bipartisan version that would have taken victims better into account. Frist plans to put the new bill on the floor this week. It should be amended to become much more victim-friendly or voted down.