NU Online News Service, May 12, 12:38 p.m. EDT, Washington–The Senate Judiciary Committee continues to draft legislation creating an alternative resolution system for asbestos injury claims today after passage of a key amendment yesterday.
Passage of an amendment, providing accelerated payments to the sickest victims, makes it more likely that such legislation will make it out of the committee before the Memorial Day break. The amendment was passed by voice vote. The bill would create a $140 billion fund to pay claimants.
Sen. Dianne Feinstein, D-Calif., introduced the key amendment. She had warned for several weeks that failure to include such language was a deal-breaker for her.
Support for her amendment was seen as key to moving the bill out of the committee. But even with that amendment, the committee still has 80 amendments to deal with going into today's session.
Yesterday's meeting was aborted after an evacuation of the Capitol and the White House after a small plane piloted by a student and his instructor intruded into a no-fly area of Washington, D.C.
The committee was operating under pressure from Sen. Arlen Specter, R-Pa., who warned the panel that if the bill wasn't passed by the Memorial Day recess there was no hope of floor action this year.
Sen. Specter explained that the bill must be in the hands of Sen. William Frist, R-Tenn., by then because if there is no floor action in June the bill will likely get overtaken by the need for the Senate to deal with must-do appropriations bills.
The amendment by Sen. Feinstein mandates that victims of mesothelioma, a fatal cancer caused by asbestos, would get one lump-sum payment within 30 days after the claim is approved by the administrator of the trust fund the legislation would create or six months from the time the claim is filed, whichever is shorter.
However, Sen. Feinstein did agree to water down the amendment to give the administrator some flexibility if money was not coming into the fund as expected.
Under the legislation, a $140 billion trust fund would be created to dole out funds to asbestos victims through 10 levels of medical criteria. Money to populate the fund would be paid by insurers and other interested parties over 27.5 years. The fund would be administered by the Department of Labor.
Approximately $5 billion would come from trust funds established by several companies under the aegis of bankruptcy courts. Those monies would be used to pay claims to those suffering from mesothelioma. Sponsors of the bill project that approximately $60 billion of the total amount would be paid into the fund in the first three years.
The insurance industry would pay out $46 billion over the life of the fund, but the amount would be front-loaded, that is, paid by insurers mostly in the early years of the fund.
According to insurance trade groups, a shortcoming of the measure is that the payments would not provide them certainty; that claims would revert to the tort system if the fund can't pay claims within nine months of the period they are finally awarded. Additionally, claims would revert back to the tort system after the law runs out in 27.5 years.
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