Will the Trust fund go broke? No, the trust fund will be privately financed at $140 billion. Concerns of the claims overrunning the fund capacity are based on lung cancer claimants overwhelming the fund, but the medical, diagnostic, latency and exposure criteria included in FAIR will weed out the non-asbestos related lung cancer claims. In the Manville Trust, the largest asbestos trust today, 8.2% of its claimants suffer from lung cancer related to asbestos and not the 75% predicted by one study (Bates White). The RAND Institute has estimated that approximately $70 billion had been spent on asbestos litigation through 2002 and approximately $40 billion of that cost went to pay (plaintiff and defendant) attorney fees. The trust fund will cap attorney fees at 5%. It is easy to see why there are such vociferous opponents to this bill.
What about the claims that we need strict medical criteria? Medical criteria are central to the FAIR Act and weeding out false claims will leave the resources for the truly sick.
Is the government going to be funding this at all? It is true that the Fund can borrow from the government; however, that ability is severely restricted in several provisions of the bill to make sure the Fund remains fiscally sound. Moreover, the US Government is explicitly protected from any and all liability for the Fund. Even if the Fund were to run out of money, it would sunset and claimants would be able to return to the courts.
Why can’t this be left to the states? It has been and can’t be any longer. This is a private sector solution administered by the federal government. State-based solutions lead to verdicts for victims that are wildly variable, leaving some victims with many millions of dollars and others with much, much less. States also cannot address particular hardships faced by our veterans. Laws restrict veterans' rights to recover from the federal government, and the companies that supplied asbestos to the government are now bankrupt, leaving veterans with nowhere to turn.
It is clear that we need a national solution preventing abuse of our legal system, compensating real victims and providing businesses with resolution regarding their liabilities. There has been much discussion and it is time to act. Senators Frist and Specter are demonstrating their courage and compassion for the physical and financial pain of many Americans.
Kemp Partners has done work on behalf of corporate defendants in asbestos litigation reform.