(The Washington Post posted the following article by Albert B. Crenshaw on its website on October 16.)
WASHINGTON — Negotiators for asbestos manufacturers and their insurers, under pressure from Senate Majority Leader Bill Frist (R-Tenn.), have agreed on funding for a national trust fund that is proposed to pay the claims of people made ill by exposure to the fibrous mineral, parties to the dispute said yesterday.
But labor union and trial-lawyer groups, which weren’t involved in the Frist talks, called the funding inadequate.
Under the terms of the agreement, insurers and defendants in asbestos lawsuits would contribute as much as $115 billion over the 20-plus-year life of the trust to pay medical costs and other damages of asbestos sufferers.
Defendant companies would pay $57.5 billion and their insurers $46 billion. An additional $1.5 billion would come from existing trusts set up in the bankruptcies of earlier asbestos companies, and the defendant companies would add $10 billion more in the final years of the trust if that were necessary.
Frist, in a statement late yesterday, said he was “very encouraged by the agreement.”
“While many details still remain to be worked out, clearly this is a significant and meaningful step forward between two major parties to the larger asbestos negotiations,” he said.
But no one involved in the asbestos dispute said they viewed the deal as a breakthrough toward a global solution to the asbestos problem, which has driven dozens of companies into bankruptcy. Members of Senate Judiciary Committee have been trying for months to find a solution.
“It’s a big boulder out of the road,” said Julie Rochman of the American Insurance Association, but “there are huge issues still staring at us.”
For example, insurers and companies want assurances that any deal would be final, but a provision of a bill approved last summer by the Judiciary Committee would throw asbestos claims back to the courts if the trust ran short of money.
Carlton Carl, spokesman for the Association of Trial Lawyers of America, called yesterday’s accord an agreement among the insurers and companies “that contributed to the poisoning of millions of Americans, to come up with an amount of money that they would be willing to pay to their victims.”
AFL-CIO General Counsel Jon Hiatt said that because the participants “have not seen fit to include us in these discussions,” the labor group had heard only rumors about the terms of the agreement. But “it sounds like this is step backward.”
The Judiciary Committee bill would have included as much as $153 billion in funding, and critics called even that inadequate. The final cost of all asbestos claims is unknown, but earlier estimates of specific cases, such as that of Johns Manville Corp., have been far too low.