WASHINGTON — Combatants in a quarter century of nasty fights over compensation for asbestos-caused illness say Senate Judiciary Committee Chairman Orrin Hatch is finally close to resolving the issue fairly — but isn't quite there yet.
Hatch, R-Utah, agrees, and called Wednesday for all sides to work quickly and harder to reach consensus, or see dozens more big companies go bankrupt, and destroy with them the money needed to compensate thousands of victims.
"To get this resolved, we will all have to dig deep, face the realities of the alternatives and work together in a bipartisan manner to come up with the best solution possible," Hatch said Wednesday in a hearing about an asbestos compensation bill he introduced.
Hatch proposes to create a new U.S. Court of Asbestos Claims. It would distribute set payments for different asbestos-related diseases. Hatch says that would end frivolous lawsuits by people who are not truly sick, and end some large "runaway" settlements allowed by regular courts that have hurt business.
Claims would be paid on a "no-fault" basis from trust funds financed through annual contributions by companies that have been named as defendants in lawsuits and their insurance companies. Hatch says victims would not need lawyers, and claims would be paid in a matter of months instead of years or decades.
Under the current system, nearly 70 companies have been forced into bankruptcy. More than 600,000 people have filed claims, and 8,400 companies have been named as defendants.
The hearing Wednesday heard from some who praised Hatch's proposals as a constitutional method to provide plenty of money for future claims. Others worried the trust fund may run out of money too soon; that some types of victims might be excluded; and that proving claims may be too difficult.
For example, Laurence Tribe, a Harvard constitutional law professor, said Hatch's basic bill "does not offend the constitutional guarantees of due process, equal protection, or right to jury trial."
But Washington attorney Carter G. Phillips testified the bill would likely be challenged on numerous constitutional grounds because of disparities in how much different companies would be required to pay into trust funds, and by litigants who likely would do better in state courts, but have that option removed.
On whether the bill would ensure enough money for all victims, Boston University law professor Eric D. Green — appointed by courts to watch over rights of future asbestos litigants — said, "Our greatest concern about the act is that it does not provide any assurance that all claims that are eligible for compensation will get paid" if trust funds run out of money.
But Jennifer L. Biggs, an actuary who has helped estimate likely costs of future settlements, said the proposed trust fund, estimated to have $108 billion over its lifetime, "appears to be more than adequate."
She predicts settling current claims under the current system would cost $130 million, but $41 million would go to attorneys and just $61 million to claimants. The new, proposed system would cut many of those costs by not requiring attorneys.
Hatch said he hopes to pass his bill out of committee next week, and urged hard work to reach a consensus on it. Without that, he said nothing will pass Congress and all sides would lose.
"Unfortunately, I also recognize that there will be special interest groups (such as trial lawyers) who benefit handsomely from the current broken system and have every incentive to stop our efforts on behalf of victims," he said, adding he expects fights from them.
E-mail: lee@desnews.com