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House committee passes asbestos bill requiring more disclosure by plaintiffs


 

The House Judiciary Committee has passed a bill to allow defendants in asbestos lawsuits to seek information on claims made to about 60 bankruptcy trusts set up to compensate people who were sickened by exposure to the carcinogen.

 

If passed by the rest of the House and the U.S. Senate, the legislation would require trusts, which operate independently of the civil court system, to make information regarding a plaintiff's claims and exposure allegations available to defense attorneys during discovery.

 

The “Furthering Asbestos Claim Transparency (FACT) Act of 2012,” or HR 4369, was introduced by legislators who say the trust funds are being depleted by fraudulent claims. Supporters, including the U.S. Chamber of Commerce and the pro-business American Legislative Council, say the legislation is needed to prevent plaintiffs from collecting damage awards from both the trusts and civil court system.

 

About 100 companies that produced or used asbestos in their products have declared bankruptcy due in to personal-injury claims for asbestos-related death or illness. At least 60 bankruptcy trusts, with a total of about $37 billion in assets, have been created to pay claims.

 

An October report by the Government Accountability Office said the trusts lack transparency, but found no evidence that claimants or their attorneys had defrauded them.

 

“Although the possibility exists that a claimant could file the same medical evidence and altered work histories with different trusts, each trust’s focus is to ensure that each claim meets the criteria defined in its (trust rules), meaning the claimant has met the requisite medical and exposure histories to the satisfaction of the trustees,” the report says. “Of the trust officials that we interviewed that conducted audits, none indicated that these audits had identified cases of fraud.”

 

Critics of the bill say it will make it harder for those sickened with asbestos-related illness to pursue claims. About 10,000 Americans die each year from asbestos-related diseases, including mesothelioma, an always-fatal malignancy that attacks the lining of the lungs, heart or abdomen. Symptoms don't typically appear until the disease has reached advanced stage, and most patients die within 18 months of diagnosis.

 

In a June 4 letter to the House Judiciary Committee, the Environmental Working Group, a Washington, D.C.-based nonprofit, said the bill is designed “to swamp the claims process with paperwork so that victims seeking compensation may never collect.”

 

“The only thing transparent about this bill is the blatant support for the industry’s decades’ long effort to run out the clock on a victim’s ability to collect a claim before he or she dies,” said Heather White, chief of staff and general counsel for the group.