On March 20, 2013, the FACT ACT (Furthering Asbestos Claim Transparency H.R. 982) was introduced in the House of Representatives for consideration. The FACT ACT is part of a national campaign being led by the American Legislative Exchange Council (ALEC) and the National Chamber of Commerce to pass certain federal and state legislation as it relates to asbestos lawsuits filed by victims of asbestos-related illnesses, such as mesothelioma.
On April 8, 2013, the FACT ACT was referred to the subcommittee on regulatory reform, commercial and antitrust law.
On May 20, 2013, the FACT ACT was discharged from the subcommittee and went to a committee consideration and markup session.
On May 21, 2013, the committee passed the bill by a vote of 17 to 14 and it now waits to be heard and voted on by the House as a whole.
On March 11, 2013, the Wall Street Journal published an article about the FACT ACT, attacking asbestos lawsuits and bankruptcy claims. The article is inaccurate and deceptive in a number of ways that warrant mentioning.
The WSJ suggested that too many asbestos lawsuits and claims were being filed on behalf of those suffering from asbestos-related illness, such as mesothelioma.
In fact, yes, there are numerous asbestos lawsuits being filed against the manufacturers, suppliers, and distributors of asbestos products. These asbestos companies knowingly exposed millions of unknowing and innocent Americans to harmful asbestos fibers, and then proceeded to cover up the dangers of asbestos in order to make valuable profits. Asbestos kills roughly 10,000 people a year internationally.
They WSJ also claimed that asbestos victims recover windfalls of money from the established asbestos bankruptcy “Trust” funds.
In fact, sadly, most asbestos victims are undercompensated for their enormous medical costs and personal losses. Asbestos corporations have long taken advantage of a system allowing companies to file for Federal bankruptcy protection, whereby they discharge future liability to asbestos victims through the creation of “Trusts” for victims. At their inception, however, these Trusts were underfunded given that the number of persons to be diagnosed with asbestos-related illnesses was greatly underestimated. Accordingly, these Trusts cannot not pay out the full value of a claim amount. The median payment payout percentage to victims is 25 %; however, some Trusts pay as low as 1.1 % of the value of a claim.
The WSJ article inaccurately posited that fraudulent claims are prevalent in the asbestos Trust system. There is no record of fraud or abuse within the Trust system. In fact, the Government Accountability Office (GAO) released a report in 2011, in response to a request from House Judiciary Chairman Lamar Smith, which refuted similar claims made by the U.S. Chamber and asbestos manufacturers, finding that the asbestos trusts are transparent and have measures in place to prevent fraud. While the article concludes that federal legislation is necessary to prevent fraud and abuse within the Trust system, this is simply not the case.
The proposed legislation is against the interest of asbestos victims. It would require private asbestos Trusts to publicly release extensive individual information about victims and would slow down asbestos cases by allowing asbestos defendants to bury the Trusts in information requests. The legislation is another attempt by Big Asbestos to delay payment to suffering victims.