Senators Debate Asbestos Suit Reform

Speaking at a Senate Judiciary Committee hearing, Sen. Baucus said that establishing very strict medical criteria, a proposal which is backed by the American Bar Association as well as the insurance industry, is arbitrary, unfair and excessively burdensome.

"It sounds clean, neat and logical," Sen. Baucus said of the proposal. "People can't file for compensation until they are actually sick, theoretically allowing defendant companies to protect their assets and ensuring a greater chance that victims will be able to recover some compensation if and when they become sick."

However, he said, the proposal would have the effect of treating all people in the same manner, regardless of their circumstances; regardless of when, where and how they were exposed; and regardless of the type of injury they suffered.

"The point is that no matter how a medical criteria standard is developed, Congress will have to choose a more or less arbitrary standard that will cut off people who have been injured," Sen. Baucus said.

"We had better be very, very sure that this is the only just way to address the asbestos litigation issue," he added. "I just can't believe that we can't be creative about this."

But Sen. George V. Voinovich, R-Ohio, endorsed the ABA's approach. It would, he said, prevent resources from being misdirected because of a flood of premature claims.

Moreover, Sen. Voinovich said, it would help companies avoid bankruptcy while protecting the rights of victims who suffer from a serious or functionally impairing asbestos-related disease.

He cited companies in Ohio, such as Federal Mogul and Owens Corning, that have had to file for bankruptcy because of asbestos litigation. Employees and retirees who owned stock in these companies have seen their assets shrink dramatically, Sen. Voinovich said.

These companies, he said, are the backbone of Ohio's economy.

"They don't want to shirk their responsibility to those victims who have or will become truly sick because of asbestos exposure," Sen. Voinovich said.

"They just want to know that they are compensating those individuals who need it and not lining the pockets of personal injury lawyers and their unimpaired plaintiffs," he said.

Sen. Patrick Leahy, D-Vt., who is the ranking Democrat on the Judiciary Committee, said he believes that if everyone works in good faith, a bipartisan solution to the problem can be achieved.

However, he said, special interest groups cannot overreach in seeking immunity from legitimate claims.

"For Congress to enact reforms this year, all the stakeholders will have to come to the table willing to work with open minds toward a realistic and reasonable solution," Sen. Leahy said.

"The answer will require the full participation not only of victims and the corporate defendants, but of their insurers as well," he added. "It will not be a stacked solution that attempts to shoot the moon for one side or the other."

Judiciary Committee Chairman Orrin Hatch, R-Utah, said he is encouraged by recent developments, such as the ABA's position on medical criteria. Congress, he added, must resolve this "train wreck."

He said he is keeping an open mind on the best approach. Sen. Hatch said he has encouraged various interest groups to provide the Committee with recommendations and he hopes that process will be completed in the next two weeks.

"Folks, time is running out before literally thousands of our most productive companies in this country and hundreds of thousands of jobs are put at serious risk by these suits," Sen. Hatch said.