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Asbestos Bill Update

As you know, the Hatch Bill was defeated this year. From this defeat comes a proposal to create a $140 billion trust fund for asbestos-related injuries. In response to the Frist bill, Minority Leader Thomas Daschle proposed to create a trust fund valued at $145 billion. Both funding schemes would include $4 billion in assets from existing trust funds that would be absorbed into the new trust fund. The Frist plan is $5 billion less than the figure in Daschle's offer in June and closely follows a recommendation generated recently by groups representing the businesses that would foot most of the bill. Both the Daschle proposal and Frist proposal also rely on funding schemes that would include $4 billion in assets from existing trust funds that would be absorbed into the new trust fund.

On the afternoon of July 20, 2004, Senator Frist gave Daschle a counter-offer and basically said take it or leave it. In reviewing the counter, the two sides are still far apart on a lot of issues and neither side will budge.

In response to these proposals, Peg Seminario, the AFL-CIO's director of occupational safety and health, said she had not seen a copy of the offer but indicated $136 billion would be "insufficient." The AFL-CIO has said $149 billion is the minimum size of the fund required to adequately pay claimants and rejected the Daschle proposal as well. Ms. Seminario stated the federation had not been formally notified of the recent discussions regarding a trust fund. However, she said, labor continues to believe that victims of asbestos exposure could not be adequately compensated unless an asbestos trust fund is valued at $149 billion with at least $60 billion guaranteed in the first five years.

Draft legislation that aims to bridge the gap between competing Senate plans for a U.S. asbestos compensation fund is being circulated by California Democrat Senator Dianne Feinstein. The bill assumes a fund of $140 billion to $144 billion, depending on whether existing asbestos compensation funds are brought into the plan. Pending asbestos injury suits would be taken out of the courts and into the new scheme unless a verdict has already been reached or the victim has entered an enforceable settlement.

According to sources close to the talks, Daschle has proposed allowing asbestos cases for which a trial date has been set to proceed in court. Frist, however, wants existing claims to revert to the new fund, except in cases where there is a final court judgment--saying businesses and insurers are not willing to fund a compensation trust while suits can still be filed in court. Under the Feinstein proposal, victims could revert to the court system at any time the fund administrator certifies the trust has run out of money. According to the Feinstein bill, if the fund fails to get going within 90 days, the sickest asbestos victims could return to the court system until the fund becomes operational. There would also be an expedited handling of claims by the fund of the most serious, terminally ill patients.

As always, we will keep you posted as to the most up to date information we have on pending asbestos legislation.