1. The Frist/Hatch proposal provides even LESS funding for victims than S. 1125, and that bill was rejected by all but one of the Democrats on the Judiciary Committee.  Asbestos defendants and their insurers have reportedly informed Senator Frist they will only provide $114 billion in funds for an asbestos trust fund – of which $10 billion would be contingent funds.  That represents $29 billion less in funding than S. 1125.  Even the contingency funding mechanism is weaker than S. 1125, because in the Frist/Hatch proposal, contingency funds would not be available to victims for at least 24 years.  S. 1125 contingency funding would begin as early as year 6 of the fund.  Independent analysts from the Congressional Budget Office (CBO) to the Johns-Manville Trust say that S. 1125 was itself inadequately funded.  Why would Senator Frist propose a trust fund that offers even less?
    

2. The Frist/Hatch proposal would delay for years compensating asbestos victims with terminal cancer, mesothelioma, and other asbestos diseases.  Currently pending claims, and claims expected to be filed once the Frist/Hatch fund is operational, have an estimated liability of between $54 billion and $58 billion.  Yet, the Frist/Hatch proposal asks asbestos companies and their insurers to pay only $5 billion into the fund annually.  That means victims with claims today – even those with claims already settled by the companies or approved by a court or bankruptcy trust – could wait as long as 11 years for compensation.
    

3. The Frist/Hatch proposal bails out Halliburton and others with pending bankruptcies and existing settlements, while shortchanging victims.  Many asbestos defendants, including Halliburton, have current or pending settlement agreements with asbestos victims.  Yet under the Frist/Hatch proposal, all payments due to victims under those agreements would be suspended and the settlements voided.  Halliburton, for example, would pay only a small fraction of the billions it has already agreed to compensate asbestos victims.  No wonder Halliburton and industry coalitions are so anxious for this bill to pass.
    

4. Even the sickest asbestos victims receive less under the Frist/Hatch proposal than under the current tort system.  Supporters of the Frist/Hatch proposal like to argue their fund will actually provide asbestos victims with more money to compensate them for asbestos poisoning than the existing system.  Sadly, this is just not true.  Even the sickest asbestos victims – those diagnosed with mesothelioma, or other fatal cancer, such as lung or stomach cancer – receive only a fraction of the compensation they could expect from the tort system.  Worse, tens of thousands of asbestos victims with pleural disease or permanent, regressive lung damage, would be denied real compensation altogether.
    

5. The Frist/Hatch proposed Trust Fund will not have the funding to pay the projected claims.  CBO predicts there will be 1.7 million asbestos claims over the life of a 27-year trust fund, at a cost of $136 billion.  Even this CBO estimate has been criticized by some experts for underestimating the cost of future claims.  David Austern, the General Counsel for the Johns Manville Trust, believes that “substantially greater funds will be needed to compensate eligible claimants than the amounts noted in the [CBO] report.”  History shows that projections of future asbestos claims are always low.  Yet, the Frist/Hatch proposal does not even meet the CBO projections, virtually guaranteeing that future claimants will be left out in the cold.
    

6. There is no guarantee that the funding in the Frist/Hatch proposal will be collected and paid to asbestos victims.  To date, the list of companies that will contribute to this trust fund is a secret.  Even CBO could only identify approximately 1,000 of the roughly 8,000 companies that industry coalitions claim to be a part of the plan.  There is no minimum contribution level required, there is no joint and several liability, there is no transparency at all in the funding system.  Even worse, the insurers’ liability is fixed, so if one insurer fails to make its payments, nobody is required to make up the shortfall to the victims.  No money, in fact, is guaranteed.  Even the CBO report warns – “The revenue stream that would be generated by the legislation is highly uncertain…”
    

7. The “unimpaired” victim is a myth – perpetuated by the asbestos and insurance industries.  Proponents of the Frist/Hatch proposal claim the majority of funds paid in asbestos cases go to individuals who are not sick – the so-called “unimpaired” – yet, nothing could be further from the truth.  According to experts, that even the asbestos defendants and their insurers themselves rely on in court, minimal exposure to asbestos fibers can lead to long term health problems.  The life insurance industry has denied life insurance benefits to victims of asbestosis for decades – yet today, insurers want to claim these victims are “unimpaired.”
    

8. The Frist/Hatch proposal places the entire risk of fund insolvency on the victims.  In a bipartisan agreement, Senator Biden amended S. 1125 to ensure that any risk of the Fund running out of money not fall on the backs of innocent victims and their families.  The Biden agreement would sunset the Fund, allowing victims to pursue their rights in the civil justice system, if the Fund is insolvent.  The Frist/Hatch proposal butchers the Biden amendment, by taking away victims’ state tort rights, and forcing them to return to Federal court, in a new court system with defenses for companies, hurdles for victims and restrictive medical criteria. 
    

9. The Frist/Hatch proposal leaves victims with a stacked deck under an unfair legal process, after the underfunded “fund” runs out of money.  If the Frist/Hatch Fund runs out of money, asbestos victims would be barred from using the state court system to seek compensation.  Instead, they would be forced into federal court, where they would face far more restrictive rules than they face in the court system today.  First, victims would have to qualify under new and untested medical criteria and then if they met the criteria, their compensation would be capped.
    

10. The Frist/Hatch proposal is NOT a “no-fault” system.  Under a true no-fault system, all workers with the same disease get the same compensation without having to prove fault.  Under the Frist/Hatch proposal, smokers with lung cancer and other deadly asbestos-related disease are penalized and receive less compensation.

 -- provided by the American Trial Lawyers Association, March 25, 2004

*** POSTED MARCH 26, 2003 ***