Mr. President, today I introduce a substitute bill to S. 1125, the “Fairness in Asbestos Injury Resolution Act,” reported out of the Judiciary Committee, for review.  I commend Chairman Hatch in getting S. 1125 through the Judiciary Committee last July where, among other successes, he led a major bipartisan solution at Committee on the linchpin issue of medical criteria.  S. 1125 as reported out of Committee provided a reasonable solution to the asbestos litigation crisis and had numerous consensus building changes all made at the request of Democrats or representatives of organized labor.

Continued negotiations have resulted in more agreements improving on the bill as reported, particularly thanks to the work of Senator Specter and Judge Becker.  Additional delays, however, will not help bring an end to the asbestos litigation crisis any sooner.  While I commend ranking minority member Leahy and the efforts of my Democratic colleagues and many stakeholders who have been deeply involved throughout the process, I fear adhering to continued calls for delays in introducing a substitute bill will be of little help.  To push the solution forward, therefore, I am providing a substitute bill for review today, even though I will not bring this bill up for a vote on the floor until after the April recess.  I welcome discussions with my colleagues as to how to improve the bill even further.

What has emerged from all the collective efforts to date is a proposal that retains the key elements of S. 1125, and includes some critical modifications that address concerns raised by stakeholders.  With the goal of a bipartisan agreement in mind, let me highlight some of the additional improvements the bill I am providing today has over S. 1125 as reported.

First, we have provided more compensation to victims.  Second, we have revised the funding provisions to help protect the solvency of the Fund while ensuring that any risk of shortfalls rests on defendants and insurers, and not on claimants.  Third, we have incorporated a new administrative system agreed to by various stakeholders that is easier for claimants to use and can begin processing and paying claims quickly.  I am also submitting a separate summary of the numerous changes made in good faith to address the concerns raised by Democrats for the record.

I. Claims Values

The top priority of this bill is to compensate claimants.  S. 1125 (as reported) already put more money into the pockets of claimants than the current tort system, where more than half of the resources go into the pockets of attorneys.  Nevertheless many of my Democrat colleagues and organized labor have advocated a further increase in the claims values.  As a further accommodation, I am now proposing additional increases in the values for several disease categories.  For example, values are increased by $100,000 for severe and disabling asbestosis.  These diseases are clearly caused by exposure to asbestos, and can have devastating effects on the victims.

Additional changes to ensure that more money is put into the hands of victims quicker were made at the request of representatives of organized labor and the Democrats, including providing for reimbursement of costs for physical examinations and requiring that structured payments be made in a 40/30/30 split over a three-year period unless a stretch out to four years is required.

II. Securing the Fund’s Solvency and Shifting the Risk of Insolvency Onto Industry

The floor bill also establishes a new overall funding framework to help ensure the Fund’s solvency.  The mandatory funding in the bill is guaranteed, and would infuse monies from the insurer participants in the early years where the most stress on the system is anticipated.  To help ensure this funding is obtained, additional safeguards, such as requiring a priority for payment obligations to the Fund in state insurance receivership proceedings, were added, and enforcement provisions of the bill were further strengthened.

Although by all accounts the money being provided to claimants under S. 1125 is significantly more than that in the current tort system, there is still some uncertainty in projecting future claims filing rates in a no-fault compensation fund.  Under the bill as reported, however, the Fund could have unnecessarily sunsetted due to a short term liquidity problem if a large number of claims were filed at once due to an inflexible trigger, which would have had detrimental effects on asbestos victims.  Alternative sunset provisions have been provided, and the borrowing authority has been expanded to increase the Fund’s liquidity.  A new program review will give the Administrator time to address short-term funding problems, and, in the event of sunset, full payment of all resolved claims (rather than 95 percent) is required as well as an orderly wind-up of the Fund.  Upon sunset, the Fund would revert to a federal tort system.  Any risk that this is not enough would still fall back on defendants with claimants getting their day in court.  Senators need not worry that any risk of insolvency will fall on the claimants.  

III. Administration and Start-up

Although S. 1125 as reported created a more accessible and simpler claims processing system for claimants than found in the tort system, organized labor expressed concerns that the administrative structure was still too adversarial and cumbersome.  The agreement mediated by Senator Specter and Judge Becker, to move claims processing from the Court of Federal Claims to an executive office situated in the Department of Labor included numerous concessions at the request of labor representatives.  In addition to placing the office within the Department of Labor rather than an independent executive agency as requested by industry, some of these changes include simplifying the claims application process, expanding the claimant assistance program, and requiring the creation of exposure presumptions to reduce the burden of proof for claimants with high risk employments.

Additional changes were made to address concerns raised by Senator Feinstein and others that there may be an undue delay in creating a new claims system, forcing living mesothelioma victims and claimants whose claims have been sitting in court for years to wait even longer to receive compensation.  Senator Feinstein’s amendment, though the goal laudable, was unworkable as it would have essentially perpetuated the status quo indefinitely and would have threatened the Fund itself.  In lieu thereof, the bill now provides interim regulations for the processing of claims, including exigent claims, interim authority, upfront funding and increased borrowing authority, which all go towards ensuring the system is up and running within months of the date of enactment.  Good public policy demands expedited termination of the broken system and preservation of funds so that payments can go to the most worthy claimants, as defined by the consensus medical criteria.

This is only meant to highlight some of the major changes from S. 1125 as reported that were made in good faith to address the concerns raised by Democrats and that are aimed at ensuring that the program established under S. 1125 was the most fair to victims, the intended beneficiaries.

S. 1125 represents an important piece of legislation.  We must not forget the provisions banning asbestos proposed by Senator Murray, revised and adopted by the Judiciary Committee.

The ban on asbestos is necessary to ensure that the dangers associated with asbestos exposure can be eliminated.  We also have a duty to our veterans, many of whom were exposed to significant amounts of asbestos while serving our nation during World War II and on ships, who have limited means of obtaining compensation for asbestos related illnesses.  The revised S. 1125, now S. 2290, represents an easier and faster avenue for the men and women of the armed services to receive fair and just compensation, while still keeping intact their veterans’ benefits.  Residents and workers of Libby, Montana also need this legislation to obtain full and adequate compensation.  We must move forward on S. 2290.

There will no doubt be constructive proposals from Senators on both sides of the aisle to further refine and improve this bill.  I encourage this process.  It is my hope that the process will be useful and not result in further delays to resolving this crisis.  I believe a fair and reasonable solution in a bill that can pass this body is possible.