The possibility of an industry fund to payout asbestos related lawsuits has been scrapped for now, due to a vote in the Senate yesterday. If it passed, the bill would have established a $140 billion fund to pay for claims on asbestos cases. However, should the fund go dry, taxpayers may be held responsible for future claims under the failed legislation.
According “Asbestos Fund Falls Short” by James P. Miller, staff reporter for the South Florida Sun-Sentinel:
Opponents of the plan, including insurance industry interests, trial lawyers and some small businesses, had condemned the measure on a variety of grounds.
Many asserted that the fund’s backers have grossly underestimated the cost of resolving the claims and that the measure might leave taxpayers on the hook for huge payments to claimants in future years. Others noted that the bill, which would oblige claimants to go through the settlement system, would deprive individual claimants of their day in court.
And some, including Democrat Frank Lautenberg of New Jersey, called the agreement too favorable to companies that allegedly knew about but concealed the health damage asbestos could cause.
Tuesday’s vote was probably unwelcome news for USG, the building-products maker that is preparing to leave bankruptcy protection and that in late January reached a deal to settle all current and future asbestos-liability claims.
USG’s agreement is structured so that the company’s liability would be capped at about $900 million if asbestos-settlement legislation clears both the Senate and the House this session. If the bill fails, as it appears to have done, then USG’s liability will total approximately $3.95 billion.