(The following article by Jennifer Corbett Dooren appeared on Dow Jones Business Wire on June 3.)
WASHINGTON — Two victims of asbestos exposure blasted a Senate bill that would revamp the asbestos-liability system.
The legislation, authored by Senate Judiciary Chairman Orrin Hatch (R., Utah), would replace the current legal structure with a special court at the federal level that would be set up to handle asbestos-related claims.
A $108 billion trust fund, funded by defendant companies and the insurance industry, would be established to pay claims.
Sen. Hatch is scheduled to hold a hearing on the bill Wednesday. The measure is backed by business and the insurance industry, but other powerful groups such as organized labor and the Association Of Trial Lawyers of America have lined up against the bill as it is currently written.
Those groups, as well as several Senate Democrats, say the $108 billion trust fund is too small, the compensation levels set in the bill for victims are too low and that the bill would only compensate those exposed to asbestos in the workplace.
Asbestos, once widely used in insulation and for fireproofing until the 1980s, can cause a particular type of lung cancer and other diseases.
Gayla Benefield, a resident of Libby, Mont., and her husband were both diagnosed in 2001 with asbestos disease, which affects the lungs. Neither worked in an asbestos mine, but Ms. Benefield said she was exposed to asbestos fibers from her father’s clothes as a child. Her father, who once worked for W.R. Grace, died of asbestos exposure in 1974 after working for 19 years in an asbestos mine.
She said of the 33 members in her extended family who have an asbestos-related disease, only three worked at the Grace mill and mine.
Ms. Benefield called the Hatch bill “nothing but a Band-Aid to protect corporate money.” Most of her family would be ineligible to receive compensation under the Hatch proposal.
Ms. Benefield and Brian Harvey, an asbestos victim from Marysville, Wash., spoke at a press conference organized by Sen. Patty Murray (D., Wash.), author of a separate bill that would ban the use of asbestos in the U.S. and provide money for additional research into asbestos-related diseases.
Sen. Murray said she isn’t opposed to a trust fund but believes it needs to be larger and that all people who have been sickened as a result of asbestos exposure need to be eligible for compensation.
Mr. Harvey, who has mesothelioma — the most serious of asbestos illnesses — would be eligible to receive the maximum $750,000 under the Hatch bill. However, that would be reduced by insurance payments for medical bills and disability payments. He said his medical bills have already topped $500,000, most of which has been paid for by insurance.
Mr. Harvey was diagnosed in 1999 with his illness, more than 30 years after he spent summers in college working at a paper-products mill. “Under this bill I would receive nothing,” he said.
Mark Peterson, a lawyer and researcher for a California legal-research firm, backed Mr. Harvey’s contention that even the sickest asbestos victims could receive very little under the bill.
Mr. Peterson, who is among those slated to testify Wednesday on the Hatch bill, said the compensation structure established in the bill is low compared to the level of compensation received from asbestos defendants. He said a mesothelioma victim is currently receiving an average of $2 million to $3 million.
The trial lawyers say they aren’t opposed to a trust fund but that it needs to be up to $250 billion to ensure there is enough money to compensate current and future victims.
But there is a split among trial lawyers. Some are opposed to any federal tampering with the current system while others are afraid too many more asbestos defendants will file for bankruptcy to eliminate the claims against them, leaving future asbestos victims without compensation.
Such concerns are also shared by Ms. Benefield and Mr. Murray, but they say the Hatch bill isn’t the answer.
She noted an elementary school playground in Libby was shut down last year after it was discovered asbestos waste was buried underneath it. “These children may not get sick for 40 years,” said Ms. Benefield, who has lobbied against asbestos-liability bills before, saying she was in Washington three years ago to fight against a similar measure.
Sen. Hatch has said more than 8,400 firms have been named in asbestos suits and that 60 of them have filed for bankruptcy.
A document being circulated by the trial lawyers called the Hatch bill the ” deal of the century” for corporations.
It noted several firms, such as Halliburton Co., would benefit under the bill. Halliburton has proposed a $4 billion asbestos settlement to rid itself of existing asbestos claims. Under the Hatch bill, the firm would pay $450 million over a 27-year period. No firm would pay more than $25 million annually into the trust fund.