No, This Isn't Another Joke About Lawyers

By Malcolm Wallop and Joe Rice

What do you get when you cross a trial lawyer with a conservative Republican?

That might sound like just another trial-lawyer joke, but, in this case, there's no punch line. Crossing a trial lawyer with a conservative Republican gets you a serious effort to stop a serious mistake from being made.

Normally at opposite sides of the table, we are working together to defeat the Fairness in Asbestos Injury Resolution (FAIR) Act of 2005.

This much-debated bill would create a corporate-backed trust fund to compensate those who have been hurt by the effects of asbestos. All the corporations contributing to the $140 billion trust fund would have sold or used asbestos in the past. The money would be disbursed over the next 30 years, with a panel looking at each case to determine how much each victim would get.

On its face, the FAIR Act sounds as though it lives up to its acronym. But scratch just below the surface and real troubles appear.

According to recent studies, the trust fund will go broke in less than three years, leaving asbestos victims out in the cold and forcing American taxpayers to pay billions of dollars to cover the shortfall. The Congressional Budget Office (CBO), the nonpartisan accounting arm of Congress, found that, under even the best circumstances, the trust fund will encounter a $6.5 billion shortfall in just the first decade.

Another study, conducted by the Bates-White research firm and released by the American Legislative Executive Council (ALEC), found that the trust fund will likely generate some $301 billion-$561 billion in claims against the $140 billion fund, causing the fund to go bankrupt within three years of its inception.

How could that possibly happen? Blame the way the legislation is written. Under the bill, the fund would compensate those who should never receive payments, the study found. As a result, the fund would go bankrupt, leaving anywhere from 383,000 to 913,000 potential future claims by victims unpaid.

When the fund does go bankrupt, the American taxpayer will be the one picking up the tab. Because the FAIR Act allows the trust fund to borrow from federal coffers, the Bates-White study estimates, the fund would be in debt $45 billion. In the best situation, the CBO estimates, the fund will be required to borrow about $8 billion dollars in the first decade if it remains solvent.

Other potential problems: What would happen if one or more of the major contributors to the fund go completely out of business? What happens if the Supreme Court decides the forfeiting of insurance required by the legislation is unconstitutional after the trust fund has been paying out billions of dollars?

Because the FAIR Act is so deeply flawed, it is grossly unfair to the people it's supposed to protect - the victims of asbestos. These people are suffering and deserve to be compensated. Yet, because the bill is so dramatically underfunded, there may be no way for the victims to get any help.

Finally, it's important to note that the FAIR Act is unnecessary. There already is a system in place for justly compensating the victims of asbestos - our court system.

The victims of asbestos and the corporations facing lawsuits should be allowed to have their day in court, and to make their cases before judge or jury. Any reform that's needed in the system can be fixed by the states. If the federal government is needed to help solve this problem, it must not devise a system that saddles taxpayers with the bill and pays out billions to people whom the legislation did not intend to cover.

Congress certainly has a lot on its plate these days, everything from spending billions of dollars to fix cities ravaged by hurricanes to filling a Supreme Court vacancy to funding a war in Iraq. Our elected leaders should worry about these issues and leave the states to deal with asbestos reform.

Trial attorneys and conservative Republicans don't see eye to eye very often. But we can all agree that this legislation reads like a bad joke: If it's passed, no one will be laughing.

Wallop (R-Wyo.) served three terms in the United States Senate, from 1976 to 1994, and is the founder and chairman of Frontiers of Freedom, a conservative advocacy group in Virginia. Rice is a prominent trial attorney who in 1998 served as the lead private counsel to the Attorney General Negotiating Committee in the historic tobacco-industry settlement in his home state.

*** POSTED OCTOBER 27, 2005 ***