Senate panel to discuss $140 billion trust fund
Birmingham News, Thomas Spencer
Published April 25, 2005
A proposal to end lawsuits over asbestos exposure and establish a $140 billion national trust fund to compensate people with asbestos-related disease will be reviewed by the Senate Judiciary Committee today. Both Alabama senators are likely to play key roles in the debate that follows.
More than 10,000 people in Alabama have sued asbestos manufacturers and suppliers, alleging they knew that asbestos, a naturally occurring mineral fiber that was widely used as an insulator and fire retardant, caused disease and death when breathed into the lungs.
Because of the heavy industry in Birmingham and ship-building in Mobile, Jefferson and Mobile counties rank among the top 100 counties in the United States for deaths from asbestos-related disease.
According to the Rand Institute for Civil Justice, 730,000 asbestos claims have been filed nationwide, with 300,000 of those still pending. More than 70 corporations have filed for bankruptcy protection as a result. As the litigation has expanded, more than 8,400 companies are facing lawsuits, many of them only tangentially involved in trade in asbestos.
It can take 20 to 40 years for disease to develop after someone was exposed, and workplace exposure was widespread into the 1980s.
For several years, Congress has tried to craft a compromise that would move the litigation out of the courts and into an administrative trust fund paid for by businesses and insurers. That would get compensation to victims more quickly and more directly and would remove a cloud over companies.
The current incarnation of the legislation was introduced last week by Senate Judiciary Committee Chairman Arlen Specter, a Pennsylvania Republican, and Democratic Sen. Patrick Leahy of Vermont.
Insurance industry groups, victims' groups, plaintiffs' lawyers and the AFL-CIO have announced their opposition to the fund in its current form. The United Auto Workers and manufacturers associations have voiced their support.
Alabama Sen. Jeff Sessions has been vocal in the negotiations leading to the settlement proposal. He's a member of a conservative bloc of senators pushing for lower caps on attorneys' fees and stricter medical standards to qualify for compensation. They also want to exclude certain forms of lung cancer from qualifying for awards.
Details of the bill are constantly shifting. To bring the conservative Republicans aboard, the bill at one point capped fees for attorneys who help clients file for benefits at 5 percent of the final award.
"I was comfortable with attorney fees limitations, but ... I just learned that may have been weakened," said Sessions, a Republican who gets about 80 percent of his campaign funds from business groups.
Bankruptcy risk:
He said the more companies that go bankrupt, the less likely that future victims will be able to recover at all. When lawsuits are filed in court, companies must spend money on defense lawyers, and plaintiffs' lawyers can take a portion of settlements and jury verdicts.
"Expert testimony has shown that only 40 percent of the money paid out by the asbestos companies gets to the victims, so this is obviously intolerable and is an embarrassment to the legal system," Sessions said. "We need to create a system by which someone who has a medically proven disease (can) get a check in short order (and) they don't even need a lawyer in most instances."
Local plaintiffs' lawyers say the standard of documentation required and complexity of the process would require victims to hire a lawyer to file for relief through the trust fund.
Awards under the trust also would be half of what verdicts are in the courts. No lawyer would want to participate in the claim system because of the minimal fees, plaintiffs' lawyers argue, and victims would be shut out of the process or give up.
Sessions disagreed. He believes people with clearly documented diseases probably would be able to file without the aid of a lawyer, and the bill has a provision for free legal counsel to assist with claims.
Is it enough?:
Plaintiffs' attorneys also question whether the $140 billion proposed would be enough. Asbestos-related deaths are not expected to peak for another 10 years and to only gradually trail off after that. The two sides have argued about what would happen if the fund ran out of money, whether victims could go back to court. Sessions wants the bill to put a permanent end to the litigation.
If the bill does make it out of committee, attention may turn to Alabama's other Republican senator, Richard Shelby, who historically has received campaign support from plaintiffs' firms.
Shelby said he'd look closely at the proposal. "I personally have never tried to limit private contracts, and that's what attorneys' fees are. Attorneys should be compensated fairly but not exorbitantly."
"Sooner or later there should be an end to litigation," Shelby said. "I know a lot of people have suffered and a lot of people have been compensated because of their exposure to asbestos, and rightfully so."
Shelby said he'll evaluate the proposal with this question in mind: "Will this compensate the victims in an orderly way and will it ultimately put an end to a lot of the litigation?"
News Washington correspondent Mary Orndorff contributed to this report.
