Asbestos bill delayed in Senate

Staff -- Industrial Distribution, 4/1/2006

Proposed legislation that would create a $140 billion trust fund to compensate victims of asbestos poisoning was put on hold for the time being after a mid-February vote.

The Fairness in Asbestos Injury Resolution, or FAIR Act, would create set financial awards for asbestos victims that would range from $25,000 up to as much as $1.1 million.

It would also require smokers with lung cancer to prove their cancer resulted from exposure to asbestos, and not tobacco, in order to be compensated by the fund.

While asbestos is used less often and more sparingly in construction projects than it was years ago, it still has an influence on builders and distributors of construction materials—on the legal front, if nowhere else. Asbestos-related lawsuits have delayed projects and even bankrupted some companies. Over the years, legislators have agreed that a new law is needed, but have been unable to settle on a specific law.

This most recent asbestos legislation was co-written by Sen. Arlen Specter (R-Pa.) and Sen. Patrick Leahy (D-Vt.), and included 20 sponsors across bi-partisan lines.

But in mid February, the Senate voted on a procedural "point of order" saying the proposed asbestos bill would put more than a $5 billion burden on budgets 10 years down the road (something that the Congressional Budget Act does not permit).

That point of order vote was 58-41. Sixty votes were actually needed to defeat that challenge, which was raised by Sen. John Ensign (R-Nev.).

Senate Majority Leader Bill Frist (R-Tn.) said in a statement that, if the 60 votes can be found, he would "look to schedule the bill at the earliest possible opportunity. The victims of asbestos exposure deserve no less."

Sen. Leahy said in a statement that there was an obvious "need to provide relief to the tens of thousands of people suffering from asbestos-related illness. Senators for and against this bill agree there is an asbestos crisis, and we must address the problem now."

The bill attempts to eliminate lawsuits over asbestos damage while stopping short of leaving victims with no legal recourse. It would also limit lawyers' fees at 5 percent.

The Rand Corp. has estimated that asbestos-related lawsuits have contributed to the bankruptcy of more than 70 companies. Rand also found in its research that since the 1970s, an estimated $41 billion has been paid out in asbestos settlements. However, of that amount, only $29 million went to asbestos victims, with the rest going to legal fees.

For several years, the Senate has been attempting to pass asbestos legislation. The asbestos issue, and legislators' views on it, is unusually bi-partisan. For example, conservatives who have opposed the bill maintain that the fund would eventually run out of money. At that time, the settlement costs could be passed on to taxpayers, they argue.

Many liberal legislators who oppose the measure also point to concerns that the money would run out. They argue that, at that point, asbestos victims could then simply be out of luck in terms of financial settlements.

Some small business owners have also opposed the bill, explaining that they'd rather take their chances in open court.