Asbestos Reform Bills Progress In House, Senate

In the Senate, reform advocates are trying to work out a bipartisan deal that could come up for consideration in the Senate Judiciary Committee before Congress breaks for its Easter recess on April 14.

Looking first at H.R. 1586, the legislation would require plaintiffs in asbestos cases to meet objective medical standards established by the American Medical Association in order for their lawsuits to proceed.

At the same time, the legislation would extend the statute of limitation for asbestos litigation to assure that those who may become ill in the future, due to the long latency period of asbestos-related diseases, will still be able file claims.

In a statement, Rep. Cannon said the current system has become a "nightmare."

"With over 200,000 asbestos liability cases still pending, people who are sick right now are not getting the help they need," he said.

"When victims or their families finally get compensated, they only receive about the same amount as people who might become sick sometime in the future," Rep. Cannon added.

"Our primary goal," he said, "is to help those who are actually ill right now and preserve resources for those who will become ill in the future."

In addition to medical criteria, H.R. 1586 contains litigation reforms to prevent forum shopping and consolidation of mass claims.

Kenneth D. Schloman, Washington counsel with the Alliance of American Insurers, Downers Grove, Ill., called H.R. 1586 "a common sense bill" and a solid step forward.

"The Alliance supports a number of provisions in the Cannon legislation," Mr. Schloman said, "ending forum shopping and mass consolidations, compensating genuine victims, applying proportional liability, and protecting innocent retailers and distributors."

Leigh Ann Pusey, senior vice president of federal affairs for the Washington-based American Insurance Association, said that the current system "cruelly disadvantages people who are truly sick and dying of asbestos-related cancers, while exacting a staggering and ever-increasing toll on virtually every sector of the U.S. economy."

Ms. Pusey said that the Cannon bill, along with the bipartisan effort in the Senate led by Senate Judiciary Committee Chairman Orrin Hatch, R-Utah, "is a clear and welcome demonstration of Capitol Hill's commitment to achieving asbestos reform this year."

Anne M. Sittmann, a representative of the Des Plaines, Ill.-based National Association of Independent Insurers, said the legislation would provide relief for Main Street U.S.A. and other businesses important to NAII that have been indirectly associated with asbestos litigation.

As for the Senate, sources told National Underwriter that one plan under consideration would create a specialized federally-established body to resolve asbestos-related claims and establish a trust fund to pay claims.

Cautioning that the situation is "very fluid" and that no final decisions have been made, sources said that the new federal facility would apply agreed-upon medical criteria to claims.

For those who have valid claims, payment would come from a trust fund that would be funded evenly between defendants and their insurance companies.

At press time, the size of the trust fund was pegged at $90 billion over 20 years. In order to determine individual contribution shares, two commissions (one for defendants and one for insurers) would be created and determine the annual allocations to the trust fund among contributors.

Contributions would be capped at $5 billion per year, half from defendants and half from insurers.

Claimants would be paid according to a still-to-be determined schedule, and there would be limited judicial review of funding allocation and claimant compensation.

Sources said that while the situation is still fluid, the hope is that a bipartisan package can be developed and considered by the Judiciary Committee by April 10.