Fairness in Asbestos Injury Resolution Act of 2005
Fairness in Asbestos Injury Resolution Act of 2005
Decades of uncontrolled use of asbestos, even after its hazards were made known, have resulted in an occupational disease crisis of monumental scope in the United States and throughout the world. In this country, from 1940 to 1979, 27.5 million workers were occupationally exposed to asbestos in shipyards, manufacturing operations, construction work, and in a wide range of other industries and occupations; 18.8 million of these cases involved high levels of exposure. As a result, hundreds of thousands of workers and their family members have suffered or died of asbestos-related cancers and lung disease, and more than a million more cases are expected. In 2003 alone, almost 10,000 people in the United States were expected to die from asbestos-related diseases. Because of the long lag between exposure and the development of cancer or other asbestos diseases, the asbestos disease epidemic is only now peaking, and will be with us for decades to come.
Thousands of people with asbestos-related disease have filed civil suits against the companies that manufactured and sold asbestos-containing products, and have been able to demonstrate that many of these firms knew about the hazards of asbestos but did not inform the exposed workers. Several of these companies have filed for Chapter 11 to allow them to restructure their debts to injured workers, making the case that if the company were to continue to pay settlements reached in court then it would become bankrupt. There are several detailed descriptions of this issue; see Carroll and colleagues and Castleman and Berger in particular.
No one likes the present situation, in which the nation's backlogged courts are unable to process the millions of asbestos claims filed by victims and contested by companies and their insurers. Victims are dying, painfully, without compensation while companies, in bankruptcy and waiting for their day in court, have their assets temporarily protected. Meanwhile, insurers cannot get an accurate assessment of the extent of their long-range obligations.
Over the past several decades there have been several attempts to have a national compensation program for asbestos-related disease, but these have all failed. Beginning in 1977, Rep. Millicent Fenwick (R-New Jersey), serving the legislative district of the company Johns Manville, introduced legislation to compensate asbestos victims from a federally administered central fund. This bill was reintroduced in 1981 and again failed to pass. Sen. Gary Hart (D-Colorado) in 1980 introduced the Asbestos Health Hazards Compensation Act. The Hart proposal was unsuccessful as well.
In 1994, Congress enacted the Bankruptcy Reform Act. This enabled some asbestos manufacturers to reorganize and establish a trust to channel future asbestos-related liability. In 1999-2000, H.R. 1283 was proposed and would establish the Asbestos Resolution Corporation. This bill would have provided full compensatory awards, including pain and suffering. The corporation would have received funding from defendant corporations, not through tax revenue. This effort was also unsuccessful.
There have been numerous judicial calls for legislative action as well. In 1991, a US Supreme Court panel appointed by Chief Justice William Rehnquist said that the asbestos situation had reached critical dimensions and the courts were ill-equipped to address the mass of claims in an effective manner. In 1996 the court, in State v. MacQueen, noted that Congress, by its inaction, had effectively forced the courts to adopt diverse, innovative, and often nontraditional judicial management techniques to reduce the burden of asbestos litigation. In 1997 in the case of Amchem Products, Inc. v. Windsor, the Supreme Court observed that a nationwide administrative claims-processing regime would arguably provide the most secure, fair, and efficient means of compensating victims of asbestos exposure. In 1999 in Ortiz v. Fibreboard Corp., the Supreme Court again called on Congress to enact national legislation.
In 2003 the Senate Judiciary committee began to work on legislation to establish a national trust fund to compensate individuals with asbestos-related disease; the program was to be funded by contributions from defendant companies and insurers, with no direct contribution from the government. It is designed to be an exclusive remedy, meaning that workers with asbestos-related disease could no longer file a civil suit. The idea of the compensation bill is to skirt the court tie-up by having the companies and their insurers agree to finance a fund that would provide fair compensation to victims without further recourse to the court system. This would eliminate the legal and contingency fees that otherwise go to the lawyers on each side, potentially saving more resources for the victims. However, no one really knows the ultimate cost of the asbestos crisis, and earlier efforts to create compensation funds for particular companies (for instance, Johns Manville) proved woefully inadequate.
Representatives from the AFL-CIO, defendant companies, and insurers have met regularly to work out details of medical criteria, award amounts, administrative structure, and payment structure, among other factors. When Congress convened in January 2005, Sen. Arlen Specter (R-Pennsylvania) assumed the chairmanship of the Judiciary Committee and assumed leadership for this legislation as well. At this moment, final details are still being worked out.
The medical criteria in the legislation were developed before the publication of the recent American Thoracic Society (ATS) document Guidelines for the Diagnosis and Initial Management of Nonmalignant Diseases Related to Asbestos in December 2003, but are largely compatible with those recommendations. The legislation establishes 9 compensable diseases, as described in the table below. Fund applicants who do not meet the presumptions set forth can apply to be reviewed by a medical panel; the panel is authorized to assign a claim to a specific level based on the findings in each specific case.
It should be noted that the Table provided is a brief summary of key findings and does not describe all the evidence that must be presented. For example, diagnosis of nonmalignant asbestos-related disease requires an examination by the physician making the diagnosis. A pathologic diagnosis of asbestosis can replace the radiographic criteria below. All of the radiologic criteria are based on classification of the chest film by a reader who has been certified by the National Institute for Occupational Safety and Health as being capable of using the Classification of the Radiographic Appearance of Pneumoconioses developed by the International Labour Organization.
One important difference between the presumptions of the compensation fund and the recommendations of the ATS is that the fund does not automatically accept a CT scan as diagnostic of asbestosis. The legislation does specify, however, that a CT scan can be submitted to the physician panel as part of a review of an exceptional medical claim. In addition, the medical criteria of this fund specify an extent of pleural plaque or thickening to qualify, while the ATS does not find that necessary. The fund provides compensation only for individuals with abnormal pulmonary function testing, even though the asbestosis does not require functional impairment.
Contributions to the fund are slated to be $140 billion over the next 25 years, but other projections put the estimated cost as high as $200 billion. On the basis of past experience, the projected cost and number of claims may well be too low. Every projection made by the Manville trust (established with the bankruptcy of Johns Manville) has been exceeded, resulting in insufficient funds to compensate victims. The Manville trust currently pays only 5 cents on the dollar of scheduled values due to the number of claims that have been filed.
Discussion continues on the draft legislation, focusing on how to ensure adequate up-front funding, which provisions should be in place in the event that the fund runs out of money, some adjustment to award levels, and provisions to establish how quickly claims must be paid.
Decades of uncontrolled use of asbestos, even after its hazards were made known, have resulted in an occupational disease crisis of monumental scope in the United States and throughout the world. In this country, from 1940 to 1979, 27.5 million workers were occupationally exposed to asbestos in shipyards, manufacturing operations, construction work, and in a wide range of other industries and occupations; 18.8 million of these cases involved high levels of exposure. As a result, hundreds of thousands of workers and their family members have suffered or died of asbestos-related cancers and lung disease, and more than a million more cases are expected. In 2003 alone, almost 10,000 people in the United States were expected to die from asbestos-related diseases. Because of the long lag between exposure and the development of cancer or other asbestos diseases, the asbestos disease epidemic is only now peaking, and will be with us for decades to come.
Thousands of people with asbestos-related disease have filed civil suits against the companies that manufactured and sold asbestos-containing products, and have been able to demonstrate that many of these firms knew about the hazards of asbestos but did not inform the exposed workers. Several of these companies have filed for Chapter 11 to allow them to restructure their debts to injured workers, making the case that if the company were to continue to pay settlements reached in court then it would become bankrupt. There are several detailed descriptions of this issue; see Carroll and colleagues and Castleman and Berger in particular.
No one likes the present situation, in which the nation's backlogged courts are unable to process the millions of asbestos claims filed by victims and contested by companies and their insurers. Victims are dying, painfully, without compensation while companies, in bankruptcy and waiting for their day in court, have their assets temporarily protected. Meanwhile, insurers cannot get an accurate assessment of the extent of their long-range obligations.
Over the past several decades there have been several attempts to have a national compensation program for asbestos-related disease, but these have all failed. Beginning in 1977, Rep. Millicent Fenwick (R-New Jersey), serving the legislative district of the company Johns Manville, introduced legislation to compensate asbestos victims from a federally administered central fund. This bill was reintroduced in 1981 and again failed to pass. Sen. Gary Hart (D-Colorado) in 1980 introduced the Asbestos Health Hazards Compensation Act. The Hart proposal was unsuccessful as well.
In 1994, Congress enacted the Bankruptcy Reform Act. This enabled some asbestos manufacturers to reorganize and establish a trust to channel future asbestos-related liability. In 1999-2000, H.R. 1283 was proposed and would establish the Asbestos Resolution Corporation. This bill would have provided full compensatory awards, including pain and suffering. The corporation would have received funding from defendant corporations, not through tax revenue. This effort was also unsuccessful.
There have been numerous judicial calls for legislative action as well. In 1991, a US Supreme Court panel appointed by Chief Justice William Rehnquist said that the asbestos situation had reached critical dimensions and the courts were ill-equipped to address the mass of claims in an effective manner. In 1996 the court, in State v. MacQueen, noted that Congress, by its inaction, had effectively forced the courts to adopt diverse, innovative, and often nontraditional judicial management techniques to reduce the burden of asbestos litigation. In 1997 in the case of Amchem Products, Inc. v. Windsor, the Supreme Court observed that a nationwide administrative claims-processing regime would arguably provide the most secure, fair, and efficient means of compensating victims of asbestos exposure. In 1999 in Ortiz v. Fibreboard Corp., the Supreme Court again called on Congress to enact national legislation.
In 2003 the Senate Judiciary committee began to work on legislation to establish a national trust fund to compensate individuals with asbestos-related disease; the program was to be funded by contributions from defendant companies and insurers, with no direct contribution from the government. It is designed to be an exclusive remedy, meaning that workers with asbestos-related disease could no longer file a civil suit. The idea of the compensation bill is to skirt the court tie-up by having the companies and their insurers agree to finance a fund that would provide fair compensation to victims without further recourse to the court system. This would eliminate the legal and contingency fees that otherwise go to the lawyers on each side, potentially saving more resources for the victims. However, no one really knows the ultimate cost of the asbestos crisis, and earlier efforts to create compensation funds for particular companies (for instance, Johns Manville) proved woefully inadequate.
Representatives from the AFL-CIO, defendant companies, and insurers have met regularly to work out details of medical criteria, award amounts, administrative structure, and payment structure, among other factors. When Congress convened in January 2005, Sen. Arlen Specter (R-Pennsylvania) assumed the chairmanship of the Judiciary Committee and assumed leadership for this legislation as well. At this moment, final details are still being worked out.
The medical criteria in the legislation were developed before the publication of the recent American Thoracic Society (ATS) document Guidelines for the Diagnosis and Initial Management of Nonmalignant Diseases Related to Asbestos in December 2003, but are largely compatible with those recommendations. The legislation establishes 9 compensable diseases, as described in the table below. Fund applicants who do not meet the presumptions set forth can apply to be reviewed by a medical panel; the panel is authorized to assign a claim to a specific level based on the findings in each specific case.
It should be noted that the Table provided is a brief summary of key findings and does not describe all the evidence that must be presented. For example, diagnosis of nonmalignant asbestos-related disease requires an examination by the physician making the diagnosis. A pathologic diagnosis of asbestosis can replace the radiographic criteria below. All of the radiologic criteria are based on classification of the chest film by a reader who has been certified by the National Institute for Occupational Safety and Health as being capable of using the Classification of the Radiographic Appearance of Pneumoconioses developed by the International Labour Organization.
One important difference between the presumptions of the compensation fund and the recommendations of the ATS is that the fund does not automatically accept a CT scan as diagnostic of asbestosis. The legislation does specify, however, that a CT scan can be submitted to the physician panel as part of a review of an exceptional medical claim. In addition, the medical criteria of this fund specify an extent of pleural plaque or thickening to qualify, while the ATS does not find that necessary. The fund provides compensation only for individuals with abnormal pulmonary function testing, even though the asbestosis does not require functional impairment.
Contributions to the fund are slated to be $140 billion over the next 25 years, but other projections put the estimated cost as high as $200 billion. On the basis of past experience, the projected cost and number of claims may well be too low. Every projection made by the Manville trust (established with the bankruptcy of Johns Manville) has been exceeded, resulting in insufficient funds to compensate victims. The Manville trust currently pays only 5 cents on the dollar of scheduled values due to the number of claims that have been filed.
Discussion continues on the draft legislation, focusing on how to ensure adequate up-front funding, which provisions should be in place in the event that the fund runs out of money, some adjustment to award levels, and provisions to establish how quickly claims must be paid.