Trust fund proposed for claims of asbestos

Federal plan could replace well-regarded Md. system

June 20, 2005|By Gwyneth K. Shaw | Gwyneth K. Shaw,SUN NATIONAL STAFF

WASHINGTON -- A congressional effort to cope with the burgeoning number of asbestos lawsuits would end a program in Maryland that has been hailed as a model for streamlining the legal process for victims of asbestos-related diseases.

Since 1992, all asbestos cases in the state have been consolidated in Baltimore Circuit Court, where about 90 percent are settled without a trial. To ensure that the sickest people get help first, Maryland created a two-tier system, with an "inactive" docket for plaintiffs who claim to have been exposed to asbestos but are not yet ill.

"It's a system that's good for the sick claimants. It's good for the court system, because it allows the judges to focus their efforts and the court's resources on the people who need them the most," said Mark A. Behrens, a Washington lawyer who has written extensively about curbing the costs of asbestos lawsuits. "And in that sense, it's also good to defendants."

But a proposal on Capitol Hill that cleared the Senate Judiciary Committee late last month with bipartisan support would substitute local efforts with a $140 billion fund to compensate victims of asbestos exposure.

The legislation would restrict asbestos victims from going to the courts for relief. Instead, they would pursue claims through a new federal department, run by an appointed administrator, that would oversee payments ranging from $25,000 to $1.1 million.

The measure would force asbestos manufacturers and insurers to pay into the fund, eliminating further liability. It also would limit attorneys' fees in most cases to 5 percent of any award.

National system

Asbestos manufacturers, companies that used the fire-retardant material for everything from pipe insulation to paint, and their insurers say a national system is essential to the companies' financial health. A study released last month by the RAND Institute for Civil Justice showed that more than 730,000 people in the United States had filed asbestos-related claims from the early 1970s through late 2002, costing manufacturers and insurers more than $70 billion.

At least 74 companies named in asbestos claims filed for bankruptcy by mid-2004, the study showed. Many more are on the brink of going under.

Congress has struggled for years to deal with the issue. But plaintiffs' attorneys and groups representing workers, family members and others exposed to asbestos fibers are wary of the latest approach. They say that a federal system would pay some victims too little and leave others out in the cold. Ultimately, they fear, the fund would run out of money.

Baltimore Circuit Judge Richard T. Rombro, who has overseen Maryland asbestos cases for more than a decade, says he is concerned that thousands of cases in the state would be transferred from a system that has worked well to one that is uncertain.

"I just think it's setting up another huge federal bureaucracy, and I really don't know that it's going to solve the problem, when there was such a simpler way to do it," Rombro said. "You're just biting off so much."

Local problem

The steel mills, shipyards and other industrial plants that once employed thousands of workers have made Maryland home to a large number of asbestos victims. Rombro said that in May alone, he was working with more than 40 new cases -- including five people diagnosed with mesothelioma, the most severe disease caused by asbestos exposure, and nearly 30 people with lung cancer.

Thousands more individual claims are on the inactive docket, Rombro said.

Maryland also is home to the tainted legacy of Columbia-based chemical maker W.R. Grace & Co. A plant in Beltsville received asbestos-tainted vermiculite from a mine in Libby, Mont. The town has been declared a federal Superfund site; the tainted vermiculite sickened thousands in Libby and in communities where the ore was shipped.

Asbestos claims drove Grace into bankruptcy in 2001. The company and some executives were indicted by the Justice Department in February on charges of knowingly exposing Libby residents to asbestos, which has been blamed for killing more than 200 people.

The federal government has determined that the Beltsville plant, which closed in the early 1990s, poses no current health risk. Claims still could arise from former workers.

Jim Fite once worked at Bethlehem Steel's Baltimore shipyard and now heads the White Lung Association, which advocates for asbestos victims. He said the legislation would be a disaster for workers.

"This thing is taking away all the victim's rights, but it's not giving them anything in return," said Fite, 58, who has lobbied against the bill.

Over the years, lawmakers and private interests have failed in attempts to navigate a deal that recognizes both the needs of victims and the companies they want to hold liable for their illnesses.

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