April 7th, 2004 - WASHINGTON,
D.C. – U.S. Senate Majority Leader Bill Frist, MD (R-TN) today
made the following statement outlining the “Fairness in Asbestos
Injury Resolution Act”:
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
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
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
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
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.