1. Payment of exigent and non-exigent claims are unfairly delayed.
The Bill stays for two years mesothelioma and cancer wrongful death cases
where families and dependents have sustained serious financial losses
and hardship. At that point, the claimants can return to the tort system
if the Fund is not ready to pay them, but they have to restart a lawsuit
that may have been close to conclusion at the time of enactment, but which
will then be stale. Even if the Fund is paying after two years, the claimants
could be required to wait 3-4 years for payment under the scheduled payout.
The Bill stays these claims for nine months even though many of the claimants
will die during the stay. Even if they survive nine months, there may
not be enough time to reinstitute the case and bring it to conclusion
prior to death. This is particularly true because the claimants will be
unable to take any action within the nine months to preserve their claim,
such as taking a video deposition of the injured party. The special provision
for exigent claims that allows them to avoid the stay by tendering within
60 days a demand to the defendants for payment of the Trust Fund amount
is simply not workable. In most cases there are multiple defendants and
the proposal requires them to work jointly to agree on funding or to choose
to fund the entire amount individually. Many or most defendants will not
be prepared financially to step in the shoes of the trust and voluntarily
pay the Trust Fund amount; even if they are given a future credit for
such payment. Further, the 150% limit on recovery in the tort system when
the defendants fail to make an offer equal to the Resolution Fund amount
is an insufficient disincentive for allowing claims to return to the tort system.
2. The Resolution Fund is not adequately funded at the outset to pay exigent claims.
Instead of actual funding, the Bill sets forth a process whereby the Administrator
and the insurance commissioner place defendants in tiers and assesses
insurer shares. Each defendant and insurer has the right to hearings and
can appeal its tier placement and share assessment. Because the bill is
opposed by many companies and insurers, contests and appeals over funding
are virtually guaranteed; meaning it will take several years before funding
issues are resolved and funding is in place. There will certainly be constitutional
challenges by insurers who are assessed shares independent of any coverage
liability and companies are placed in tiers regardless of actual future
tort liabilities. At this point, no one knows how it will all add up,
but in the interim (and maybe permanently) there will be funding shortfalls.
Further, the borrowing provisions that were designed to help with initial
funding shortfalls have been essentially neutered in the new draft because
the federal government has no liability for any loans and no other liability
under the Fund. Instead, the front end and later shortfalls are limited
by borrow capacity that prevents the Fund from borrowing more than the
available Fund assets and the amounts expected to be paid by participants
over the subsequent 10 years. However, if initial funding is delayed by
substantial company and insurer appeals, this limitation could preclude
3. The sunset provisions do not allow for an automatic return to the tort system.
The Bill appears to provide a sunset provision if the Administrator concludes
that the fund will not be able to pay claims as they become due. However,
the proposed provisions provide the Administrator with a number of victim
unfriendly alternatives to sunsetting the Act. The Administrator can change
the diagnostic or medical criteria, or change the enforcement or application
of those criteria, or change the timing of payment, or change the amount
of award values, etc. All of these would have the effect of watering down
or even eliminating compensation for victims. These alternatives put Bill
supporters in the position of agreeing in advance to a system of diluted
compensation that they would never agree to at the enactment stage. It
seems likely that the Administrator, whose job is to run the Trust, will
be inclined to reduce values or impose more onerous diagnostic and medical
criteria rather than sun-setting the Act. Victims are not protected when
the Fund runs short of money and the alternatives include decreasing or
extending payments or even eliminating payment by changing the criteria.
Worse yet, the Administrator is not even in a position to select and implement
these alternatives. Instead the matter is referred to a cabinet level
commission, or their designees, who then make recommendations to Congress,
which need not act within any specified time frame if at all.
4. The Specter Bill is a criteria bill excluding all mild asbestos disease
victims from compensation.
Claimants with milder asbestos disease, the majority of all asbestos victims,
get nothing but medical monitoring under the Specter Bill. Through 2002,
claimants in Nonmalignant Level I (Sec. 121, p.76) accounted for 262,308
of 504,832 total claims paid by the Manville trust, 51.9 % of all claims.
They received 568 million of the 2.88 billion paid out by the trust, or
almost 20% of the total (See, memorandum and order by Judges Weinstein
and Lifland, Dec. 27, 2002). These claimants, the majority of asbestos
victims who now have access to the courts to seek compensation, will get
nothing but a chest x ray under the Specter Bill.
5. The Specter Bill excludes many victims of asbestos-related lung and
Under the bill, asbestos victims with these cancers who do not also have
non-malignant asbestos-related disease are excluded and get nothing, despite
of a medical consensus that people with heavy asbestos exposure are at
a substantially increased risk of these cancers, regardless of whether
they also have asbestosis or pleural disease. Despite the well-documented
explosive risk of combining these two carcinogens, smokers with cancer
are penalized under the bill and get nothing unless they also have non-malignant
6. Libby, Montana asbestos victims receive favorable treatment compared
to other asbestos victims.
Even the mildest asbestos disease claimants from Libby Montana receive
at least 400,000 dollars, while the basic asbestosis victim from anywhere
else only gets 25,000 dollars, if he or she qualifies at all (most do
not) (See, Section 121, p.90 and section 131, p.91). This is unfair to
other former asbestos mine and plant workers.
7. The scheduled values are too low and discriminate against smokers.
Seriously impaired asbestosis/pleural disease victims receive only 25,000
dollars under the Specter bill, unless they are disabled. This is a fraction
of the compensation these individuals currently receive in the courts
and the asbestos bankruptcy trusts. Even though most of the current non-malignant
claimants will not qualify at all, the bulk of those that do will be underpaid.
Categories III through V, the more serious asbestosis cases with more
reasonable values, will account for a tiny fraction of all non-malignant claims.
Smokers with asbestos cancer are badly discriminated against in the Specter
bill. They receive a fraction of the values of non-smokers and ex-smokers.
For example, smokers with lung cancer and pleural disease get only $300,000,
while a non-smoker with the same condition gets $800,000, despite the
explosive combination of these carcinogens in causing asbestos cancer
(See, section 131 (b)(1), p.91). What's worse, the definitions of
non-smokers and ex-smokers are ridiculously strict and out of step with
the definitions of non-smokers and ex-smokers used in medicine. This is
another way of denying victims rightful compensation (See, section 131(b)(2),
p. 92). Mesothelioma.Mesothelioma is the most serious and invariably fatal
disease caused by asbestos, and the one most strongly associated with
asbestos exposure to the exclusion of almost any other established cause.
Mesothelioma victims are also treated unfairly by the Specter Bill.The
"one size fits all" approach to mesothelioma compensation under
the Bill will result in a grave injustice to many asbestos victims. New,
radical treatments offer themesotheliomavictims a chance for extended
life, but in many instances these treatments cost hundreds of thousands
or even millions of dollars--as much as all or most of their scheduled
award. The court system currently allows these victims to require the
asbestos companies to pay all of the cost of this treatment, plus other
losses they've suffered.
8. FELA Cases are now included in the bill.
Asbestos-related FELA claims, previously excluded from the bill, have now
been included. The Bill requires a lengthy, ponderous arbitration to determine
the values these claims will receive (See, section 131, p. 93-100).
9. Payments due under the Specter Bill will trickle out to the victims
over three or four years.
After waiting what is likely to be months or years for the fund to start
paying claims, and months or years more while the administrator wades
through the thousands of pending claims, a claimant who is approved will
have to wait years more to be compensated fully through the fund. The
bill provides at least three and as much as four years for an approved
claim to be paid, unless the claimant is alive and suffers from mesothelioma
or is otherwise deemed "exigent
10. A victim's compensation under the fund will be reduced by any prior
settlements received in the tort system
If an asbestos victim has received all or part of their scheduled award
in the tort system before the fund becomes operational, the fund gets
a credit for any previous settlements. If a victim has received at least
the scheduled amount from some of the defendants in their lawsuit before
the bill's passage, the remainder of the claim against other, solvent,
responsible defendants is completely offset and wiped out by the Specter
Bill. The remainder of the claim is worthless once the bill becomes law.
This is an unlawful taking of property.
11. The Bill allows defendants and insurers to avoid paying finalized tort
A number of victims have settled claims with defendants in the tort system
and are counting on payment of those settlements to pay their medical
bills and take care of their families. Although the Bill suggests that
final settlements where the only remaining act is payment will be honored,
the proposed language carves out most torts settlements by requiring that
a written settlement agreement be signed directly by the defendant or