Asbestos Litigation: Prospects for Legislative Resolution
Publication Date: May 2005
Publisher(s): Library of Congress. Congressional Research Service
A large volume of litigation has been occasioned by occupational exposure to asbestos, which may ultimately result in payments of $200 billion or more and has already bankrupted numerous companies. This litigation "explosion" has led to a number of innovations in legal process, but some of the settlements that seemed most promising were overturned by the Supreme Court, with the Court suggesting that the situation "calls for national legislation."
One approach, embodied in H.R. 1957 (Cannon et al.), would conserve the resources of defendant corporations -- many of which have been bankrupted by asbestos cases -- so that funds could be applied first to workers who are already sick. This would be done by establishing precise standards for proving the presence of asbestos disease for legal purposes and postponing the cases of those who might show evidences of exposure but are not yet impaired. H.R. 1957 would also apply to the asbestos problem a number of principles known under the more general rubric "tort reform."
The other bill receiving attention in the 109th Congress, S. 852 (Specter) would also establish standards for proving injury but, instead of taking the tort reform approach, would remove the cases from the court system entirely. In its place would be an administrative system and a special fund to pay claims. S. 852 would define nine asbestos disease categories, each with a specified level of compensation, ranging from $25,000 to $1.1 million. The fund from which claims would be paid would be financed by assessments on defendant companies and their insurers. Each of the largest firms subject to assessment would be responsible for paying up to $27.5 million per year for up to 30 years, with an overall funding goal of $140 billion.
The most debated points of S. 852 have included the adequacy of the funding scheme, the levels of compensation, medical criteria (especially as regards smoking history), and start-up and close-down issues.
This report discusses such issues thematically, and will be updated to reflect major legislative actions. A section-by-section analysis of S. 852 may be found in CRS Report RS22081, S. 852: The Fairness in Asbestos Injury Resolution Act of 2005.