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Commentary: The Asbestos Mess: There Is A Way Out


When a dozen large business insurers on Apr. 4 took a shot at Congress' plans for a trust fund to compensate asbestos victims, lawmakers and business groups scrambled to insist that a deal could still be struck. The National Association of Manufacturers declared that it was still squarely behind the long-stalled proposal, and Senate Majority Leader Bill Frist (R-Tenn.) expressed optimism that legislation could pass this year. "I am confident we will have a bill, that centers on a trust fund, on the floor of the Senate in the not-too-distant future," Frist told reporters.

That's the spin. The reality: The insurers' rejection was just the latest nail in a coffin that was hammered shut months ago. Business infighting, overreaching on all sides, and the Bush Administration's lack of leadership killed any chance for the trust fund. Now, business has little chance of winning a deal that in one swoop would settle billions of dollars in asbestos claims and put an end to a litigation free-for-all that has bankrupted more than 60 companies. To pull itself out of the morass, Corporate America must instead regroup around a simpler fix that could eliminate 90% of pending cases.

The trust fund looked like a good idea in 2002. Confident that President George W. Bush's tort-reform drive would coast through a GOP-led Congress, asbestos defendants -- industrial companies, insurers, and retailers sued because they sold asbestos-laced products such as brake pads or shingles -- pressed for an overarching solution that would take some 300,000 lawsuits out of state courts. Under their plan, a business-financed fund would award claimants a fixed payment based on how sick they are. The fund, Corporate America figured, would cap its liability.

But the trust fund is collapsing under the weight of its complexity. A global settlement requires agreement in advance on minute details -- how much an out-of-breath smoker who was exposed to asbestos should collect compared with, say, a lifelong asbestos worker dying of lung cancer. After 2 1/2 years of negotiations, insurers, manufacturers, and labor groups still are squabbling over basics such as who should pay what into the fund and what happens if it runs dry. Meanwhile, the fund's projected price tag has soared to $140 billion. With Corporate America riven, the White House never put any muscle into asbestos, ranking it a poor No. 3 on its list of legal priorities.

Now, negotiators should rally around another idea: the "medical criteria" approach. It leaves asbestos cases to the courts, but gives the sickest victims top priority. Congress would instruct judges to consider claims only from victims who exhibit specific symptoms of asbestos-related disease. The rest would be put on hold, retaining the right to sue later should they get sick. Advocates say medical criteria could do away with some 90% of pending claims -- including many filed by opportunistic lawyers hoping to land quick, easy settlements.

The medical-criteria fix is gaining ground in the states. Ohio passed legislation last year. Georgia Governor Sonny Perdue, a Republican, is expected to sign a similar bill this month, and bills are moving in Texas and Florida.

In Washington, the medical-criteria concept has long enjoyed backing from a large swath of the business community. But the most important support could come from the sickest asbestos victims and their lawyers, who fear that companies will be bankrupted before their claims are ever heard. These advocates have broken with other trial lawyers and labor to create a vital opening for compromise.

It's time for business and the GOP to accept that deal. With the Senate gearing up for an all-consuming battle over judicial nominations, Congress has no time to waste. If Bush wants to end the asbestos impasse, he'll have to put the weight of the White House behind the simpler yet effective approach. A medical-criteria bill -- such as the measure Representative Chris Cannon (R-Utah) plans to reintroduce in the House -- would give business and the courts much-needed relief while protecting the rights of real asbestos victims.

By Lorraine Woellert


Reviving Keynes
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