Newly appointed Senate Judiciary Committee Chairman Arlen Specter held a long awaited hearing on asbestos compensation legislation today. Apparently it wasn't boring. (I covered some of the background of this story yesterday. The latest version of the asbestos comp bill can be found on the NYCOSH website here.)

AFL-CIO Health and Safety Director Peg Seminario described the history and basis of the debate:

For the last several decades we have seen the toll of workers and family members disabled and killed by asbestos disease mount to staggering levels, the result of the willful practices of manufacturers and employers who withheld information about the hazards of asbestos, and did little or nothing to control exposures. The result of these actions is an occupational and environmental disease crisis of unprecedented magnitude. Hundreds of thousands of victims have already suffered and died from cancers and disabling lung diseases. Hundreds of thousands more will suffer or die in coming years.

As the disease crisis has grown, so has litigation as victims have sought redress for their injuries. While the civil litigation system provides justice for some asbestos victims, because of long delays, high transaction costs, and inequitable distribution of compensation among victims, it is far from an optimal system for compensating victims and their families. In addition, as companies with the greatest responsibility for asbestos exposures have sought bankruptcy protection, plaintiffs have increasingly looked to other firms for relief, creating uncertainty for those companies about future liability and uncertainty for victims about whether sources of compensation will be available in the future.

It is for both these reasons – the massive asbestos disease crisis and the serious problems with the current litigation system – that the AFL-CIO has engaged so deeply in efforts to craft a legislative solution.

John Engler, President of the National Association of Manufacturers (NAM), testified in favor of an asbestos trust fund as long as it was strictly limited to $140 billion and "completely shut down the broken asbestos tort system. " Engler was rejecting a deal that was being considered last year with Majority Leader Bill Frist (R-TN) in which in return for limiting the fund to an amount less than what labor considered adequate, claimants would be able to return to court if the fund ran out of money.

Seminario called NAM's sudden objection to this alternative "disingenuous."

The AFL-CIO’s preference from the beginning would have been to create an evergreen fund – one that would be replenished as necessary to ensure that all meritorious claims are paid in full, as long as there are victims of asbestos exposure. Absent an evergreen fund, however, the only fair alternative is to permit claimants to return to the courts once the Administrator determines that the fund cannot satisfy their claims. We cannot believe that the Congress would create a system that would leave asbestos victims totally without recourse if the fund collapsed.

No one who is honestly committed to establishing this asbestos compensation fund wants to see claims revert to the tort system. But there must be a safety valve to protect future claimants.

There were a number of other issues separating the sides including whether any workers compensation or other payments should be subtracted from workers' awards, how to deal with workers who smoked and were exposed to asbestos and whether there would be a medical screening program. Seminario argued that a medical screening program is "necessary for the early detection of disease, so that interventions can be made to lessen the impacts and/or prevent the disease from progressing."

Seminario also noted that while it was good that the current bill banned the further use of asbestos, its recommendation for stiffer penalties for employers who expose their employees was meaningless unless Congress also toughened OSHA's ability to impose criminal penalties. Right now, OSHA can only prosecute if a willful citation causes the death of a worker. Given the long period between exposure to asbestos and death, criminal prosecutions wouldn't be practical.

Specter is determined to get a bill out soon: "It's now or never," he said yesterday, adding that it would be more difficult to get floor time later in the year. Labor and the trial lawyers have vowed to once again stop any bill that falls short of their goals. Sixty votes would be needed to override a filibuster.

Labels: Asbestos