Proposed Federal Asbestos Legislation

Fairness in Asbestos Compensation Act of 1998

Senate Bill S.2546

Senators Hatch, Dodd, Ashcroft, Lieberman, Sessions and Toricelli have introduced the Fairness in Asbestos Compensation Act of 1998, as Senate bill S.2546. The bill deserves your attention and support, because, as initially drafted, it would prevent most asbestos cases like the cases which we are currently defending. The legislation establishes minimum thresholds for the severity of disease and number of years of asbestos exposure required in order to even initiate a claim.

S.2545 would establish an Asbestos Resolution Corporation, which would review all claimants' claims before they could seek any recovery. Claimants would be required to submit clinical or pathological proof of their claimed disease, including actual impairment, twelve years of latency for nonmalignant conditions and ten years of latency for malignant conditions. Exposures from 1976 through 1979 would be discounted 50%, and exposures after 1979 would not be counted at all. On the other hand, primary employment installing, repairing or removing asbestos would count double (2x), and manufacturing asbestos products from raw asbestos or using asbestos products in shipyards during World War II count four times (4x).

An asbestos claim which survived this review of the threshold requirements would be subject to mandatory mediation. After the claim was released from mediation, the claimant could elect either to arbitrate through the Asbestos Resolution Corporation or litigate in federal court. Litigation in state court would be eliminated. Damages for fear of cancer or risk of cancer or other disease would be eliminated. Punitive damages would be eliminated.

All the costs of operation of the Asbestos Resolution Corporation would be paid for by the defendants. The corporation's directors, who would be appointed by the President with the advice and consent of the Senate, would establish a budget and bill the defendants pro rata based on the number of claims (i.e., the numerator would be the number of claimants who named the defendant, the denominator would be the total of all claims by all claimants against all defendants with each claim by a claimant against a single defendant treated as one claim). The Asbestos Resolution Corporation would be required to establish a deminimus threshold, below which a defendant in only a small number of claims would not contribute to the cost of operation of the corporation. The shares of all such deminimus defendants would be reallocated among the paying defendants.

The bill as originally drafted is 92 pages long. Obviously, this is only a very bare summary. Some of the thresholds for qualifying to assert a claim are technical As with any federal legislation, there likely will be a lot of lobbying on all sides to make changes.

As initially drafted, the legislation appears to establish a balance between accelerating resolution of cases for the benefit of claimants, especially by allowing them mandatory, binding arbitration, and eliminating the delays and bottlenecks of court litigation, and funding of the new system by the defendants only, opposite elimination of claims by persons who are not sick yet, elimination of damages for fear of cancer and risk of subsequently getting cancer or other diseases, and eliminating punitive damages.

Please let us know if you would like a copy of the bill. Should you have any questions, please call Dana Sack or Joanne Rosendin.

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