Insurers Optimistic About Asbestos Bill

Washington

In the wake of several major bankruptcies, insurance companies and business groups believe Congress might be ready to seriously consider legislation to resolve the asbestos litigation morass.

Although a formal bill is still being drafted, Julie Rochman, senior vice president of public affairs for the Washington-based American Insurance Association, which is taking a lead role in the effort, said that the concept of the legislation will be very simple. It will draw a line between people who are sick and those who are not sick, she explained, adding that the basic concept of establishing medical criteria to determine when a lawsuit can be filed has precedent in federal legislation.

In addition, Ms. Rochman said, to assure that those who have been exposed to asbestos but who are not currently sick do not lose any of their rights to compensation, the bill would liberalize statutes of limitations. This, she explained, would preserve the ability of those who are not currently sick to go to court if and when they meet the medical criteria established by the bill.

She emphasized that the bill being contemplated is not tort reform. It will not contain any caps on damages or attorneys fees, Ms. Rochman said. Rather, she noted, it will allow those who are suffering from asbestos-related illnesses to be compensated.

Ms. Rochman said she hopes to see the bill introduced early this fall with bipartisan co-sponsorship. She believes that there is a real possibility of generating support from Democrats despite the broad perception that legislation like this would not have a chance in the Democratically-controlled Senate. Some prominent Democrats, she said, are interested in the legislation.

Mark Behrens, an attorney in the Washington office of Shook, Hardy & Bacon, which represents a group of insurers called the Coalition for Asbestos Justice, said the situation has changed since the previous Congress considered asbestos litigation.

Since the end of the 106th Congress, he said, some major firms have declared bankruptcy citing pending asbestos litigation. This, Mr. Behrens said, has had a significant impact on the broader business community. As those defendants who manufactured asbestos have declared bankruptcy, he said, plaintiffs attorneys have been trying to cast their net wider, seeking damages from companies that never manufactured asbestos, but simply had some connection with it in the normal stream of commerce.

Moreover, Mr. Behrens said, the current system has even split the plaintiffs bar. Plaintiffs attorneys, he said, generally fall into two categories–those who represent claimants with serious asbestos-related illnesses, such as mesothelioma, and those who represent claimants who have been exposed to asbestos, but who are not ill.

However, he added, the claims made by those who are not ill, which he contends are driving companies into bankruptcy, reduce the amount of money available to compensate those who are truly ill. This, he said, has created a tension among those lawyers who represent claimants who are ill and those who are not ill. As a result, Mr. Behrens said, some members of the plaintiffs bar might be willing to support legislation that favors plaintiffs who are ill and preserves money so they can be compensated.

Thus, he said, the legislation Congress will consider is likely to have far broader support from the general business community than previous bills, as well as potential support from some plaintiffs attorneys. While enactment of legislation is probably still a long-shot, he agreed that the political dynamic is changing.


Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 10, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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