ALEC Releases Report Highly Critical of Asbestos Litigation Reform Legislation
Trust Fund Meant to Last 30 Years Will Run Dry in Just 1-3
WASHINGTON, Sept. 19 /PRNewswire/ -- Today, the American Legislative Exchange Council (ALEC) released a study for informational purposes on The Fairness in Asbestos Injury Resolution (FAIR) Act of 2005, and found the legislation to be fundamentally flawed. The report, done by Bates White, a Washington, D.C. based economic consulting firm, will be released Monday, September 19, 2005 at Mealey's National Asbestos Litigation Conference being held in Philadelphia. The Bates White study found that the FAIR Act, which removes asbestos claims from the courts and creates a $140 billion asbestos trust fund, to be financed by defendants and insurers, has one prevailing problem that cannot be overcome: it will be bankrupt in just 1-3 years. The study determined this financial shortfall will result primarily from many individuals with lung and other cancers, who were not historically compensated with asbestos lawsuits, to now be compensated by the FAIR Act. Additionally, claimants who have settled with most, but not all defendants, could now be able to use the FAIR Act to recoup additional payments. Sandy Liddy Bourne, the Director of Legislation and Policy for ALEC, said, "The report has conclusively shown that the FAIR Act is going to be bankrupt in just a few years. The people who this legislation was designed to help, the real victims of asbestos exposure, are going to be left out in the cold because the trust fund created by the FAIR Act will go broke. We have model legislation which has been enacted in Ohio, Texas, Florida, and Georgia that addresses the asbestos litigation crisis in an effective manner which assures that the real victims of asbestos exposure are compensated." ALEC prefers state-level action on this matter. According to the study, the FAIR Act would create asbestos claims worth between $301 billion and $561 billion for individuals who assert a work history either with, or in the vicinity of asbestos. Since the funding level of the Trust Fund is $140 billion over 30 years, the result would be a funding shortfall of $161 billion to $421 billion and could leave 383,000 - 913,000 potential future asbestos victims uncompensated.
SOURCE American Legislative Exchange Council
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