Statement Of Senator Patrick Leahy,
Ranking Member, Senate Judiciary Committee
Consideration Of S. 852, The Fairness In Asbestos Injury Resolution,
Or FAIR Act
Senate Floor
February 6, 2006

I am pleased to join Senator Specter, the Chairman of the Judiciary Committee, Senator Feinstein and others in urging my colleagues to move to consider, S.852, our bipartisan bill to address the serious and urgent problem of asbestos-related disease.  The time is now for Congress to solve this dire situation – victims have been waiting long enough for a comprehensive, national solution.

This legislation is the product of years of difficult and conscientious negotiation.  Building on the Judiciary Committee’s work last Congress under former-Chairman Hatch, we have crafted a fair and efficient plan that will ensure adequate compensation to the thousands of victims of asbestos exposure, but that also will give due consideration to the businesses that should, and will, provide that compensation.  Our bipartisan legislation does that.  Asbestos has wreaked havoc on the lives of the victims of asbestos exposure and has overwhelmed our Nation’s court system as it tries to compensate them.  We have worked hard and long in an open process to produce a balanced bill that offers fair solutions.   

Senator Specter, with whom I have worked very closely, rightly calls this one of the most complex issues we have ever tackled.  It is not the bill that I would have written, were I alone responsible for its drafting, nor is it the bill that Senator Specter would have produced.  It should not surprise anyone to hear that the interested groups – the labor unions, the businesses contributing to the trust fund, their insurers, and the trial bar – are each less than pleased with some portion of the bill or another.  That is the essence of legislative compromise.  We have kept the ultimate goal of fair compensation to victims impaired by asbestos exposure as the lodestar of our efforts, and we have all had to make compromises on a variety of subsidiary issues as we worked together to resolve this emergency.  What we have achieved is a significant and needed step toward a more efficient and more equitable method to compensate asbestos victims.  The fact that only 42 cents of every dollar spent on the burgeoning dockets of litigation in this area goes to actual victims of asbestos exposure is a national disgrace.  We can and we must do better for all involved in this crisis.  They need our help and they need it now.

The Ravages Of Asbestos

Asbestos is one of the most lethal substances ever to be widely used in the workplace.  Between 1940 and 1980, more than 27.5 million workers were exposed to asbestos, and nearly 19 million of them had high levels of exposure over long periods of time.  We even know of family members who have suffered asbestos-related disease from washing the work clothes of their loved ones.  The ravages of disease caused by asbestos have affected tens of thousands of American families.  We need a more honest and reliable health screening program and swifter compensation for those affected. 

In light of the devastating damage asbestos has wreaked, it is hard to believe that this dangerous product is still being used today, yet it is.  This bill will put a stop to that, and by doing so, we will protect yet another generation from becoming victims of asbestos exposure.

The economic harm caused by asbestos is also real, and the resulting bankruptcies are a different kind of tragedy for everyone -- for workers and retirees, for shareholders, and for the families that built these companies.  In my home State of Vermont, the Rutland Fire and Clay Company is among the more than 70 companies to have declared bankruptcy. 

The late-Chief Justice Rehnquist has declared that the elephantine mass of asbestos cases “cries out for a legislative solution.”  In additional opinions written by Justice Ginsburg, the Supreme Court has repeatedly called on Congress to act because “a nationwide administrative claims processing regime would provide the most secure, fair, and efficient means of compensating victims of asbestos exposure.”  I agree, our Committee’s Chairman agrees, Senator Feinstein agrees, and we hope that many others in the Senate will agree.

Broad Support

This bipartisan legislation has earned the support of many organizations that represent victims of serious asbestos exposure.  Asbestos disease has tragically weighed especially heavily on one group in particular – our nation’s war veterans.  These brave veterans are unable to receive compensation under our current system and have repeatedly asked their representatives in Congress for help.  The Military Order of the Purple Heart noted in their last letter of support that “the FAIR Act is the only viable solution for sick veterans.”

In their latest letter to the Minority Leader urging him to proceed to consideration of our bipartisan bill, more than 30 organizations representing veterans noted that “The FAIR Act’s victims’ trust fund would open a door for Veterans that has been closed for years.”

Other organizations that represent victims of asbestos exposure have also endorsed our bipartisan bill.  In the past week, we have received renewed letters of support from the International Association of Heat and Frost Insulators and Asbestos Workers union, the International Union of United Automobile, Aerospace & Agricultural Implement Workers of America (UAW), and the International Union of Painters and Allied Trades.  These labor unions represent literally hundreds of thousands of families that have suffered from asbestos exposure.  They support S.852 because they are “firmly convinced it would be far superior to the current tort system in compensating the victims of asbestos-related diseases.”

The National Governor’s Association has also called on Congress to proceed on this bipartisan bill.

In addition to the support of groups that represent those exposed to asbestos, our bill has earned the support of small businesses like the 600,000 members of the National Federation of Independent Business, as well as hundreds of larger companies that will be contributing to this $140 billion dollar trust fund. 

These statements of support in many ways tell the story of what we have accomplished with this legislation:  We have crafted a bill fair enough to garner a favorable response from veterans groups, labor unions, small businesses, and companies with considerable asbestos liabilities.  We have worked on this legislation for several years now, and as my partners in this effort can attest, garnering this level of consensus has been no small feat.   I ask unanimous consent that the text of these letters be printed in the Record.

A Carefully Balanced Bill

The bipartisan efforts of the last two years have been productive.  With the help of Senior Judge Edward Becker, the primary stakeholders have worked diligently, and as a result we have reached a compromise agreement on a national trust fund that will fairly compensate victims of asbestos exposure.  With the Chairman’s leadership, the disparate interests have reached consensus on many issues such as overall funding of $140 billion and a streamlined administrative process within the Department of Labor.   Compensation will be awarded and paid outside of the court system through a simplified administrative claims process.  There is no need to prove liability or identify a particular defendant’s product.  There is, instead, a claims process where those who exhibit specified medical symptoms and evidence of disease are compensated.  

Last Congress I was disappointed by the bill reported by the Judiciary Committee (S.1125) and by the purely partisan bill that was introduced as a substitute without Committee consideration (S.2290).  As compared to those efforts, our bipartisan bill includes significant and necessary improvements:  Our bipartisan bill provides higher compensation awards for victims, with $1.1 million for victims of mesothelioma, $300,000 to $1.1 million for lung cancer victims, $200,000 for victims of other cancers caused by asbestos, $100,000 to $850,000 for asbestosis, and $25,000 for what we call “mixed-disease cases.” 

All likely asbestos victims are eligible for medical monitoring, and unlike previous asbestos bills, our bipartisan legislation provides for medical screening of high-risk workers, a relatively low-cost way to make sure that those most likely to be harmed are diagnosed properly and without the taint of some screening programs that have occurred in the past. 

Another essential improvement in our bipartisan bill ensures that victims’ awards from the new trust fund will not be subject to subrogation by insurance companies.  This means that victims will not have to give up any of their much-deserved compensation just because they received workers’ compensation or health insurance benefits in the past. 

The initial funding of this trust fund is more substantial than the partisan bill from the last Congress, providing for almost $43 billion of the total $140 billion in the first five years.  And unlike the earlier bill, this bill ensures that the contributors into the fund will be a matter of public record, as are their obligations to the fund.  We have also strengthened enforcement provisions so that the Fund Administrator can collect contributions owed by businesses. 

Our bill also guarantees that pending court cases that are before juries, and certainly those that have reached judgment at the trial court level, will not be upset by the new trust fund.  Previous bills would have preempted these mature cases and overridden all civil settlements that had any remaining payments or performance outstanding.  Our bipartisan asbestos bill protects those settlements between named defendants and named victims, and also protects settlements that provide for future health insurance or health care. 

There are other improvements to the trust fund plan over last year’s effort.  The partisan legislation of last Congress provided no real incentive for the fund to start processing claims.  Thanks in large part to Senator Feinstein’s work, the Specter-Leahy bill creates an incentive for the fund to begin processing claims quickly:  If it is not operational within nine months, the sickest victims will be able to return to the tort system.  If the fund is not operational within 24 months, all asbestos victims can return to the tort system. 

Victims of asbestos exposure who have less than a year to live and those with mesothelioma deserve an especially fast track to compensation.  Currently, many victims wait years in pending court actions or pending bankruptcy confirmation to receive any final determination of their claim.  Once their claims are adjudicated in the current system, payments are often further delayed because of lengthy appeals and their recovery is diminished significantly by attorneys fees and court costs.  Also, many of these victims receive only pennies on the dollar from overwhelmed bankruptcy trusts.  Our legislation provides them lump sum payments and strong incentives for expedited settlements for these victims.  I thank the senior Senator from California for her tireless efforts on behalf of those citizens in the most urgent need of our help. 

In negotiating this complex legislation we compromised on one category of compensation for a particular class of lung cancer sufferers.  Those who have had significant asbestos exposure, but whose x-rays show no markings of asbestos-related disease, are not entitled to compensation under the Fund.  Because of the absence of asbestos markers, it is not possible to conclude that asbestos caused their disease.  If they develop markings, however, they will become eligible for compensation from the asbestos trust fund. 

As with many other administrative compensation programs, this bill sets a limit on attorneys’ fees for claims within the Fund.  In connection with this asbestos fund, the limit is set at 5 percent on victims’ awards within the fund.  There are no attorney fee limits for representation of asbestos victims outside the administrative Fund.  Unlike the current system where victims received less than half of the money spent, this fee cap removes any incentive for litigation abuses and puts more money into the hands of those injured by asbestos exposure.

In addition, in order to prevent victims of asbestos exposure from retooling their complaints to circumvent the asbestos trust fund, the bill also imposes a higher burden of proof within the tort system for plaintiffs seeking damages resulting from exposure to silica.

The Scourge Of Asbestos Disease Must End

The problems we are addressing are complex, this bill necessarily reflects these complexities, and its drafting was not easy.  The compromises we had to make were difficult but necessary to ensure that we created a trust fund that would provide adequate compensation to the thousands of workers who have suffered, and continue to suffer, the devastating health effect of asbestos.  The tragic history of asbestos use in our country must come to an end. 

Under a provision authored by Senator Murray that we have included, which was accepted during the last Congress by the Judiciary Committee, this bill will ban the maintenance and distribution of asbestos. 

We must halt the harm asbestos creates and ameliorate the harm it has already caused.  The industrial and insurer participants in the trust fund will gain the benefits of financial certainty and relief from the stresses of litigation in the tort system, and the victims will have a quicker and more efficient path to recovery.

I thank Chairman Specter, Senator Feinstein, Senator Baucus and my colleagues on the Judiciary Committee for working so hard with me on this bipartisan legislation.  

I urge Senators to support this compromise legislation to, at long last, help solve the asbestos problem by providing fair compensation to victims of asbestos exposure.

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