The NewStandard ceased publishing on April 27, 2007.

Asbestos Trust Fundâ€TMs Latest Try Raises Same Concerns

by Michelle Chen

June 19, 2006 – Legislation to create a national asbestos trust fund is once again drawing criticism for allegedly shortchanging the injured, making the public pay for employers’ wrongdoing, and setting the stage for eventual financial collapse.

In late May, Senate Judiciary Committee Chair Arlen Specter (R-Pennsylvania) rolled out his second attempt this year to forge a compensation system for one of the country’s most massive occupational-health problems. The Fairness in Asbestos Injury Resolution Act of 2006 proclaims an end to what many corporate defendants call a "litigation nightmare." But critics say the new bill simply dresses up the anti-lawsuit, pro-corporate agendas of its predecessor.

"A bad bill was simply made a lot worse," said Michael Tucker with the Committee to Protect Mesothelioma Victims, an advocacy group for patients with the rare asbestos-related cancer. Noting that the bill’s biggest supporters include companies linked to hundreds of thousands of sicknesses and deaths, he added, "Victims have never been involved in crafting this legislation, and they’ve been left out in the cold yet again."

Following the same framework as legislation blocked earlier this year in the Senate, the bill would move asbestos-injury cases out of courtrooms and into a "no-fault" claim trust-fund system administered by the Department of Labor. The fund would be financed through pre-planned contributions by corporations and insurers facing litigation for making workers sick.

Critics say the new bill simply dresses up the anti-lawsuit, pro-corporate agendas of its predecessor.

Projected to dole out about $140 billion to victims and their families over the course of three decades, the fund would, in theory, provide efficient compensation for the injured and minimize financial damage to corporations.

Building on the previous bill’s controversial medical criteria, the new proposal would require more extensive medical evidence and paperwork to prove an injury. Echoing criticisms of the tort system aired by corporate defendants, Specter argued that a more rigid process would discourage fraudulent and frivolous claims driven by individuals looking to take advantage of the courts.

The new bill reflects earlier demands from some industry interests for an even more watertight ban on asbestos lawsuits. It rescales companies’ funding obligations to accommodate smaller businesses, forecloses "dormant" claims that have idled in existing dockets for years and blocks lawsuits for certain unresolved claims even after the fund "sunsets" or runs out.

The legislation also responds to victims’ concerns that the fund would not be inclusive enough, mainly with overtures toward special treatment for Hurricane Katrina survivors and people impacted by toxic pollution from World Trade Center ruins.

In a Senate speech promoting the bill, Specter argued that maintaining the existing civil litigation system would lead to bankruptcies and "prolong the suffering of asbestos victims, companies and their employees."

The proposed fund has encountered resistance from not only victims, but also public-interest groups worried that the bill would replace the courts with corporate welfare.

Still, the fund continues to encounter resistance not only from victims, but also from public-interest groups worried that the bill would replace the courts with corporate welfare.

Opponents question the fund’s capacity to handle the hundreds of thousands of anticipated claims related to asbestos, which is linked to various types of cancer and respiratory illnesses causing about 10,000 deaths per year, according to estimates by the Centers for Disease Control.

Though some groups representing workers and other claimants do not oppose the idea of a federally led solution– organizations like the New York Committee for Occupational Safety and Health (NYCOSH), which have long criticized the trust-fund proposal, decry the current effort as a half-baked corporate bailout destined to fail all stakeholders.

Jonathan Bennett, a spokesperson for NYCOSH, dismissed corporate lobbyists’ arguments that litigation is posing an excessive hardship for firms. "The fact that the people with asbestos disease have gotten to the point that they’re winning enough lawsuits to make the companies uncomfortable," he told The NewStandard, "doesn’t turn the companies into their victims."

According to a 2005 analysis by the consumer-advocacy organization Public Citizen, the trust fund would allow corporate giants like Dow Chemical to escape billons of dollars in lawsuit liabilities. Several companies with the heaviest liabilities would be rapidly relieved of future payouts from their private trust funds, which firms have established to settle asbestos claims.

One of the biggest beneficiaries of the collective trust fund, according to Public Citizen’s investigation, would be Viacom, which recently reported over 110,000 asbestos claims brought against its subsidiary Westinghouse, along with post-insurance liabilities approaching $60 million in 2004. Both internal memorandums and federal Labor Department inspectors, dating back to the 1930s, have cited dangerous asbestos exposures at Westinghouse facilities, but reveal that the problems were systematically neglected or ignored.

Advocates for people affected by World Trade Center pollution say the bill makes flimsy promises of assistance.

Additionally, advocates for people affected by World Trade Center pollution say the bill makes flimsy promises of assistance. Though one clause does mention Ground Zero, exposure survivors have the right to file an "exceptional claim" for relief, critics point out that this option offers no guarantee of compensation, and is available to all claimants who fail to meet the bill’s standard medical criteria.

The bill requires proof of several years of "substantial" asbestos exposure, weighed according to the nature and timeframe of the contamination, among other factors that may impact disease development, such as smoking history.

Those criteria leave largely unaddressed less obvious forms of contamination, such as exposures in the households of workers in asbestos-related industries. At Ground Zero, the exposure time was relatively short, but involved unprecedented concentrations of airborne asbestos, compounded by inadequate protective gear for workers and residents caught in the toxic dust.

For John Feal, a Ground Zero demolition supervisor, the possibility of developing an asbestos-related disease looms over a host of problems incurred since working for less than a week at the site: post-traumatic stress, breathing problems and other debilitating ailments that have struck thousands of other rescue and recovery workers.

Calling the amendment "political breadcrumbs," Feal argued to TNS, "I’m not one of those people that need to sue for everything in the world, but if you’re legitimately sick… and you weren’t given the right protection, I call that negligence, and you have every right to sue."

Some medical experts fear that even those whose claims are approved for compensation will simply not receive enough, since the funding scheme is based not on any projection of true medical needs, but rather on payments arranged in closed-door negotiations between corporations and the government. Awards will range from $25,000 for less severe health damage to $1.1 million for cases of mesothelioma.

In a statement to Congress issued earlier this year by the advocacy coalition Doctor-Patient Alliance for Responsible Asbestos Cancer Policy, thoracic surgeon Robert Cameron warned that for mesothelioma patients, "The costs of staying alive will far surpass the bill’s arbitrary cap."

Watchdog groups warn that if the trust fund falls apart, taxpayers may have to pick up the pieces: the Congressional Budget Office estimated in 2005 that the fund’s private revenues could fall several billion dollars short of total expenditure, potentially requiring reliance on government funds.

Though Specter has proposed to guard against insolvency through a so-called "master trust," which would issue payouts to victims after the main trust fund’s termination, the new bill has not quelled fears that sick people would be even more tightly shut out once the initial corporate funding pool dries up.

Designed as a financial fallback, the proposed master trust would supposedly continue absorbing future claims after the sunset of the first fund. This would preserve the federal role in the asbestos claims process while helping to shield companies from new lawsuits.

But critics say that the successor trust could worsen claimants’ chances of fair recompense by tethering them to a bankrupt system. The plan is unclear on how the master trust would be funded, yet at the same time, it would bar people otherwise eligible for trust-fund compensation from taking companies to court.

"[If] the master fund kicks in and then becomes insolvent," explained Laura MacCleery, director of Public Citizen’s Congress Watch, "basically everyone without a [resolved] claim at that point would be completely without a remedy."

Some victims’ advocates see potential for the federal government to establish an equitable system for compensating victims, but many say Specter’s proposal is marred by misplaced priorities. Asbestos-related illness, Bennett said, is "a public-health crisis that has economic ramifications. It’s not an economic crisis that has public-health ramifications, which is the way the Senate is dealing with it."

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The NewStandard ceased publishing on April 27, 2007.

This News Article originally appeared in the June 19, 2006 edition of The NewStandard.
Michelle Chen is a staff journalist.

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