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July 03, 2003 7:27 PM
Congress Takes Up Legislation to Overhaul the Asbestos Compensation System

After weeks of difficult negotiations, members of the Senate Judiciary Committee approached an agreement concerning asbestos liability compensation just before the Senate adjourned for a week-long break on June 27. If Democrats and Republicans on the committee can reach agreement on outstanding questions when the Senate resumes working after the Fourth of July, there is a good chance that a controversial asbestos compensation bill will be approved before the end of July.

The proposed legislation aims to create a special federal asbestos court, which would have jurisdiction over all asbestos liability claims, ending the current system, under which people who have been injured by asbestos may file product liability lawsuits against asbestos manufacturing companies, or companies that used asbestos-containing products, in state or federal court. 

Hundreds of thousands of such liability cases have been filed, resulting in billions of dollars paid out by asbestos companies and their insurance companies to people who have been injured and to the estates of people who have been killed by exposure to asbestos. More than 60 companies have declared bankruptcy after repeated losses in court. As a result of the bankruptcies, many people with asbestos injuries have seen their prospects of collecting a substantial award dwindle. 

The asbestos liability compensation system that would be set up by the proposed legislation, called the Fairness in Asbestos Injury Resolution Act (S.1125), would be run by a federal asbestos court, which would have jurisdiction over all pending asbestos claims and any claims arising in the future. 

The draft legislation includes detailed medical criteria for each of ten degrees of asbestos-caused disease, assigning to each a set amount of compensation. The funds for the compensation would come from a trust fund to be set up with payments from the asbestos manufacturing companies and from insurance companies that wrote liability insurance for them.

Among the most controversial aspects of the legislation are the medical criteria that will be used to determine whether a person is eligible for compensation and how much they will receive, if eligible. 

When the legislation was first proposed by Sen. Orrin Hatch (R-Utah), the medical criteria in it were sharply criticized by organized labor and by many occupational health physicians and trial lawyers. According to its critics, as initially proposed, the bill's medical criteria would have excluded as many as three-quarters of the people who are now eligible to be compensated in the tort system. After intense negotiations, the bill's sponsors agreed to a completely re-written section on medical criteria, which are also acceptable to the AFL-CIO, according to AFL-CIO Safety and Health Director Peg Seminario. 

"We have agreement on medical criteria and they are now pretty close to the position we put forward months ago," said Seminario. But, she added, "We are strongly opposed to the Hatch bill in its current form. There was an agreement reached on a medical criteria amendment. An amendment was [also] proposed by [Sen. Dianne] Feinstein (D-Calif.) and accepted that would provide for some additional funds if needed, but this is still not sufficient to deal with funding shortfalls. " 

Seminario told NYCOSH that she expects negotiations on the final bill to resume when Congress returns after the Fourth of July holiday. "There are still many problems with the bill including inadequate, unfair claim values, lack of adequate [initial] funding and [for] the long term, an adversarial court system, [and] preemption of the Federal Employers' Liability Act, just to name a few," she added. 

A major role in the negotiations over the bill is being played by the AFL-CIO, in part because many Senate Democrats have indicated they will not support an asbestos compensation bill that is opposed by the union federation. Because any new legislation in the Senate can be blocked unless 61 senators support it, the Democrats who support the AFL-CIO position are hopeful that they have the votes to prevent an unacceptable bill's passage.

"You must remember that the Senate Democrats are not unified in support of the strongest possible protections for workers who have been injured by asbestos," said Dr. James Melius, an occupational doctor who is the Director of the New York State Laborers' Health and Safety Trust Fund. "The reality is that the Republicans may have the votes to pass a bill in spite of opposition from health and safety advocates and organized labor. So we may be forced to negotiate a bill that is far from ideal."

Some occupational health physicians and trial lawyers who represent injured workers remain critical of the bill's compromise medical criteria. This bill "ignores the medical science published in the last 10 years," says Dr. Michael Harbut, an occupational physician practicing in metropolitan Detroit. The criteria "will probably exclude 70 percent of my patients with asbestosis," Harbut added. "Some of my patients, who qualify for total and permanent disability under Social Security because of their exposure to asbestos, would not be eligible for compensation under the criteria of this bill. Many of my patients who would not be eligible for compensation under these criteria are unable to get health insurance or life insurance because they have a confirmed diagnosis of asbestosis. I am very troubled by the idea of Congress writing the diagnostic criteria for a disease into law."

Other questions about the medical criteria were raised by Dr. Steven Markowitz, an occupational physician who is Executive Director of the Center for the Biology of Natural Systems at Queens College. "At least 30 to 40 percent of the cases of asbestos-caused pleural disease that I see would not be eligible for any compensation under these criteria," Markowitz told NYCOSH. "I also think that the criteria require a duration of exposure to asbestos that is too long. For example, a shipyard worker with asbestos disease after three years of heavy exposure to asbestos would not be eligible for anything, even though as a medical matter it could be said that the disease was caused by that 3-year exposure."

One aspect of the bill's medical criteria that has been sharply criticized by the medical community is the criteria's reliance on increasingly obsolete x-ray films to establish a diagnosis. "High-resolution computerized tomography (HRCT) should be explicitly recognized as evidence to support the diagnosis of asbestosis," wrote Dr. Homer Boushey, the president of the American Thoracic Society in a letter to the chair of the Judiciary Committee, Orrin Hatch and the ranking Democratic member, Patrick Leahy. "Neglect of HRCT may also tie adjudication to technology that will soon be obsolete."

"This bill would exclude many of my clients who are now able to collect compensation for asbestos exposure," says attorney Ruth Marcus, of the firm Wilentz, Goldman and Spitzer in New York City and a member of the NYCOSH Board of Directors. "Many workers who are seriously disabled as a result of their exposure to asbestos," said Marcus, "do not have the exact set of diagnostic signs laid out in the bill's criteria, so they would lose all their rights to compensation. There are many examples, but to take one in particular, many construction workers with asbestos disease who did not work with asbestos but who worked around asbestos workers would have very little chance of receiving compensation under these criteria."

Another aspect of the draft legislation that has come in for criticism are the amounts of compensation assigned to each level of asbestos disease. For example, the highest level of compensation is $750,000 for a person diagnosed with mesothelioma, which is a cancer of the lining of the lung that is invariably fatal. That amount, according to attorney Jon Gelman, is "one-third of their average compensation" received through the tort system. 

Injured worker advocates also question whether the legislation will be able to deliver on its promise of speeding up the payment of asbestos liability claims. If the law is passed, the asbestos court will immediately assume jurisdiction over all pending asbestos liability cases, to be compensated out of a trust fund that will initially have a small fraction of the total funding it will receive. "The asbestos court will delay payments, not speed them up," said Carlton Carl, spokesperson for the Association of Trial Lawyers of America. "On Day 1 of the fund there will be almost no money and between 300,000 and 500,000 claims," Carl added. "Experts on compensation have indicated that the asbestos court will need up to nine years for those initial claimants to be compensated."

If the federal asbestos court law is passed, then all pending asbestos liability cases, including those that are on appeal and even those in which asbestos companies have agreed to pay compensation but have not yet done so, would be terminated and referred to the asbestos court, where they would need to be considered anew.

The Hatch bill focuses almost exclusively on compensating occupational exposure to asbestos. Only two kinds of non-occupational exposure will be compensated if the legislation passes in its present form. One exception in the draft bill would be to compensate victims of asbestos disease living in Libby, Montana, a town that was contaminated with asbestos by dust and debris from a nearby mine. The other exception would be to compensate family members of asbestos workers who were exposed to asbestos dust carried home on work clothes. "Where does that leave all the people who have been exposed to asbestos in vermiculite insulation, and where does it leave the kids who might have been exposed when they played around asbestos-wrapped pipes in their parents' basement?" asks Harbut. 

"Our fundamental aim is to insure that anyone who is injured by exposure to asbestos is able to receive fast, adequate compensation for their injury," said NYCOSH Executive Director Joel Shufro. "It is clear that the Hatch bill, as originally proposed, would not have that effect," he added. "Many experienced occupational physicians and attorneys with great expertise in asbestos compensation tell us that the bill, even in its compromise form, remains far short of what is needed. This is too important an issue to be settled in an enormous rush to meet some arbitrary deadline. Any compromise needs to be fully discussed in appropriate public forums so that all concerned groups can register their reactions to it. The health and welfare of tens of thousands of workers are at stake."

-- From the July 3, 2003 NYCOSH Update on Safety and Health

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