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For Victims’ Sake, New Congress Must Solve Asbestos Problem By Jerry A. Hodge A growing glut of lawsuits stemming from the widespread use of asbestos for insulation and fireproofing decades ago has slowed the wheels of justice for too many Americans with serious, asbestos-related illnesses. The good news is that, after years of debate, the question of how to fairly and efficiently compensate asbestos victims may finally be resolved in Congress next year. Until now, compensation for those made ill by asbestos exposure has come through the judicial system. But real asbestos victims may wait years to receive compensation because much of what Supreme Court Justice David Souter has called the “elephantine mass of asbestos cases” grows from an increasing number of lawsuits filed by plaintiffs who aren’t even sick but claim to “fear” becoming sick some day. In fact, a majority of asbestos settlements now go to such “non- 22 Years of Asbestos Litigation malignant” claimants, most of whom are • In 1982, there were only 300 asbestos functionally unimpaired. The courts defendants. Today, there are more than have become so clogged by the sheer 8,400, including companies in nearly all number of suits that many plaintiffs don’t types of industries in the U.S. even live long enough to have their • By 1982, litigation had cost American cases heard. And adding insult to injury, businesses $1 billion. By 2002, costs more than half the compensation jumped to more than $70 billion. ultimately awarded to plaintiffs is siphoned off by “transaction fees,” the • On average, claimants only receive 43 cents bulk of which go to lawyers. of every dollar; the rest goes to legal fees and other “transaction costs.” On top of unconscionable delays SOURCE: RAND Institute for Civil Justice and indignities suffered by the truly ill, our economy is also suffering as trial lawyers revel in this “litigation lottery.” Nobel Prize winning economist Joseph Stiglitz has reported that more than 70 U.S. companies and 60,000 jobs have already been lost as a direct result of asbestos litigation bankruptcies. Retirees from bankrupted companies lose, too, when the value of their pensions, 401(k) plans and health coverage are slashed or disappear altogether. For every 10 jobs lost to an asbestos bankruptcy, a surrounding community may lose another 8 jobs in the aftershock. And Stiglitz predicts worse economic disruption to come if we don’t find a better solution to our asbestos problem. The good news is that many lawmakers in Washington understand the huge human and economic costs represented by the asbestos status quo and are trying to do something about it. Working with industry and victims’ representatives, Senate negotiators this year came close to agreeing on legislation that would have created a $140 billion trust fund – paid for by industry and its insurers – from which standardized compensation could be paid to asbestos victims who meet basic medical criteria. Roughing out such an agreement wasn’t easy. Some companies were much more involved with asbestos than others, and some victims are much more impaired than others. Many victims also smoked or worked with other hazardous substances that may have contributed to their medical conditions. The process of determining who should pay how much and to whom is inherently complicated. But progress has been made. And as a new, more pro-growth Congress prepares to be sworn in next January, many observers are optimistic that the powerful trial lawyer lobby will finally meet its match. A reelected President Bush has begun to map out a busy legislative agenda for 2005 and there’s hope asbestos litigation reform will be included in that agenda, along with other sorely needed legal reforms. The leadership of Senate Majority Leader Bill Frist (R-TN) will be critical in finishing the job of asbestos reform and Pennsylvania’s Senators Arlen Specter (R) and Rick Santorum (R), along with Delaware’s Senator Tom Carper (D) should be encouraged to continue their support – hundreds of thousands of American jobs could be at stake. More importantly, as a special asbestos committee of the U.S. Judicial Conference has warned: “Unless Congress acts to formulate a national solution ... all resources for payment will be exhausted. That will leave many thousands of severely damaged Americans with no recourse at all." ____________________________________________ Jerry A. Hodge is Senior Regional Manager for the National Association of Manufacturers based in Pittsburgh, Pa. His region includes Pennsylvania, West Virginia, Maryland, Delaware, Kentucky and the District of Columbia. The NAM is the nation’s largest industrial trade association, representing thousands of member companies in every industrial sector and in all 50 states.
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