Senate Near Deal On Asbestos Trust Fund

By Arthur D. Postal and Matt Brady, Washington Bureau

NU Online News Service, April 12, 7 :33 p.m.EST?An agreement on asbestos injury litigation legislationcreating a trust fund for victims, that is disliked by theinsurance industry, but which could speed through the Congress withbipartisan and presidential support, appears imminent.[@@]

According to various insurance industry, business andcongressional sources, the deal will call for creation of a $140billion trust fund with the authority to borrow $20 billion againstthe fund.

Sen. Arlen Specter, R-Pa., chairman of the Senate JudiciaryCommittee, confirmed such a deal at a press conference thisafternoon. "I still do not have the final results until senatorstake a look at it, but I'm more than hopeful, I'm optimistic we'llhave a bill which will get out of committee and beyond," Sen.Specter said

At the same time, Sen. Patrick Leahy, D-Vt., ranking minoritymember of the committee and a key negotiator, said, "I think thatwe are very, very close to a bill that Senator Specter and I willboth support ?The question will be the number of people from bothour parties who will be able to join us in the legislation.

Support for Sen. Specter was also voiced by a key Republican,Texas Sen. John Coryn. "I for one am pleased with the directionit's been heading," he said.

Sen. Coryn, also a member of the Judiciary Committee, was namedby Senate Majority Leader William Frist, R-Tenn., to serve as aliaison between Sen. Frist and Sen. Specter.

Later, a staff official of the American Insurance Association,which has taken the lead in coordinating insurance industryresponse to the proposal, said they could not comment at this timenoting, "We have just received our copy of the draft and we arelooking it over. It's more than 300 pages.

"I think that we are very close to a deal," Sen. Specter saidearlier in the day. "There are meetings this afternoon at 2 p.m.going over a couple of items which are still outstanding, and thenthere's a meeting at four o'clock among Republicans. We had ameeting yesterday among Democrats."

Sen. Specter said, "We circulated the bill for the first timethis morning; there was a tremendous amount of negotiations to cometo the specifics on the bill, and the bill now is in written formand has been circulated."

He explained that "it's a little hard to get co-sponsors untilyou have the bill
in writing, and it's a voluminous bill, so it's going to take alittle time for people to read it."

The insurance industry has been lobbying, with the support ofcertain companies targeted by asbestos injury class actions, sinceDecember to kill a deal based on the fact that a settlement by theHalliburton company and other agreements had put the worst behindthe industry, and that, based on that information, creation of a$140 billion trust fund would be excessive.

The insurance industry and defendant companies had recently puttheir lobbying efforts behind a medical criteria bill. UtahRepublican Rep. Chris Cannon said recently he is drafting such abill and soliciting co-sponsors.

According to sources, the bill discussed by Sen. Specter alsocalls for a reversion of all claims to the tort system if the moneyruns out, a key concern of the insurance industry. However, therevised bill will have some venue limitations even though it willallow claims to revert to either federal or state courts. Keyprovisions require a case can be heard in a court located in ajurisdiction where the claimant is a resident or the defendant isbased or the injury occurred.

A key point in the measure which brings Republican support,especially from the White House, is a provision limiting attorney'sfees to five percent for base claims and 10 percent on appeals.

The bill also bars payments to workers exposed to asbestos, butexhibiting no symptoms other than lung cancer. Insurers, otherbusinesses and conservative committee members had pushed for thisprovision. Sources said, in a concession to Democrats and organizedlabor, the bill also calls for accelerated handling of claims formesothelioma victims and others faced with terminal illness.