Senate Kills Asbestos Fund

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Posted on 22 Feb 06

On a procedural budget vote, the U.S. Senate killed a proposed $140 billion private asbestos victims fund that has been years in the making. The final vote was 58 to 41, with 60 votes needed to keep it alive.

The bill had been designed to remove asbestos cases from the civil courts and speed payments to victims of asbestos exposure from a private fund paid for by manufacturers, suppliers, insurers and other businesses affected by asbestos litigation, which has bankrupt 80 firms. Under the act, the Department of Labor would administer payments.

Previously, the Senate voted overwhelmingly 98 to 1 to consider The Fairness in Asbestos Injury Resolution Act, as opponents of the measure went along with the majority because they lacked sufficient votes to defeat it. However, this recent vote saw some conservative Republicans join Democrats in refusing to support the bipartisan measure. Some opponents fear that the fund may not be sufficient to cover all the claims and will eventually require a taxpayer bailout, while others object to it as a bailout of large corporations that could shortchange victims.

In the vote, Senate Majority Leader Bill Frist, (R-Tenn.), switched his vote to "no" at the end to preserve his right to force reconsideration of the trust fund, making the final vote 58-41. "We'll make a decision on that at some point in the future,'' Frist said about a possible new vote on the FAIR act.

Insurers are worried that the fund is not as exclusive as it should be, that the insurance industry's $46 billion contribution would not be the end of its liability, and that the medical criteria used for deciding who gets awards are insufficient. "The last thing that a national trust fund should do is to allow asbestos litigation to continue after the bill is signed into law, or be constructed in a way that ever allows a return to the same litigation system that has created the problem in the first place," testified Craig Berrington, the American Insurance Association's general counsel.