[Congressional Record (Bound Edition), Volume 150 (2004), Part 5]
[Senate]
[Pages 6944-6945]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              THE FAIR ACT

  Mr. CHAMBLISS. Madam President, I rise today to speak on the need to 
resolve the crisis in the asbestos litigation.
  S. 2290, the Hatch-Frist-Miller FAIR Act of 2004--FAIR, of course, 
stands for Fairness in Asbestos Injury Resolution Act--is a bill that 
would solve many of these problems in an expedited fashion.
  S. 2290 will secure fair and equitable compensation for asbestos 
victims who, right now, face uncertainty, delay, and risk in the court 
system. As things stand today, compensation for asbestos-related 
injuries is more likely to be determined by where and when your claim 
is filed and who your lawyer or judge is than by how sick you are.
  Under the current system where companies can declare bankruptcy and 
substantially avoid paying damages, a truly injured victim might 
recover absolutely nothing for their actual harm, while a claimant with 
no physical impairment can recover his or her whole claim. That is 
simply not right.
  The FAIR Act would cut down on delays in compensation to asbestos 
victims. Today, courts are being overwhelmed by a flood of asbestos 
cases, with some truly ill victims actually dying before they see their 
day in court. An estimated 300,000 claims are pending; 730,000 
individuals have already brought claims; and 60,000 to 100,000 new 
claims are filed each and every year. However, at least three-quarters 
or more of current claims are from the unimpaired. Bankruptcies which 
often result from massive court filings by unimpaired claimants further 
delay and diminish compensation to truly injured victims.
  S. 2290 would save American jobs and preserve pensions. American jobs 
are being lost because of this broken system. Asbestos-related 
bankruptcies have led to the direct loss of as many as 60,000 jobs, 
with each displaced worker losing up to $50,000 in average wages and an 
average of 25 percent of the value of their 401(k) accounts. Moreover, 
an estimated 423,000 new jobs will not be created because asbestos 
defendants will have to reduce capital investments by as much as $33 
billion.
  The FAIR Act would revive the economy, as asbestos litigation costs 
are currently wreaking havoc on American business. As approximately 
8,400 companies in all industries have been targeted, the cost of 
capital for American businesses has increased by as much as 14 percent, 
annual capital investment has gone down $1.6 billion, and annual 
economic growth has been slowed by $2.4 billion. More than 70 American 
businesses have filed for asbestos-related bankruptcies, 35 of these 
just since the year 2000.
  In sum, S. 2290 will provide fair and timely compensation to asbestos 
victims and certainly to American workers, retirees, shareholders, and 
the U.S. economy. Congress has never been more close to resolving the 
asbestos litigation crisis than it now is with S. 2290.
  This bill provides for a privately funded, no-fault national asbestos 
victims' compensation fund that will step into the shoes of the Federal 
court system and ensure that individuals who are truly sick receive 
compensation quickly, fairly, and efficiently. The FAIR Act retains the 
bipartisan agreement on medical criteria that the Judiciary Committee 
approved last year. These criteria form the basis of a no-fault 
victims' compensation fund that will stop the flow of resources to the 
unimpaired and ensure that the truly ill will be paid quickly and 
fairly.
  S. 2290 contains many improvements made to its predecessor, S. 1125. 
The

[[Page 6945]]

new bill reflects several months of intensive negotiations by the 
stakeholders in this important debate and affirmatively addresses the 
major issues of concern identified by the stakeholders following the 
Judiciary Committee approval of the original bill S. 1125.
  Let me take a minute to say that as a member of the Judiciary 
Committee, I have been a party to a lot of the negotiations--certainly 
not all of them. Chairman Hatch has done a great job of steering the 
negotiations, but this has been a bipartisan effort.
  I take a minute to commend Senators on the other side of the aisle, 
some who are on the Judiciary Committee and some who are not, including 
Senator Feinstein, Senator Biden, Senator Dodd, Senator Kohl, and 
others, who have been strong proponents of trying to reach a conclusion 
of this asbestos litigation issue. I don't know how they will vote on 
the final bill. That is not important to me right now. But it is 
important they have negotiated in good faith and been a party to the 
negotiations in a fair and reasonable manner. I commend them for taking 
part and for their cooperative spirit as we have gone through these 
negotiations.
  S. 2290 includes revised funding provisions. The new bill establishes 
a fund that can pay $114 billion in claims, with an additional $10 
billion in contingent funding available from defendant companies. Money 
required to go to the fund from defendants and insurers is assured over 
a period of 27 years. Defendant participants, for example, guarantee 
their funding obligations through a grant of authority to the 
administrator of the fund to impose a surcharge in any year where 
monies received fall short of the annual requirements. S. 2290 also 
provides up to $300 million annually in hardship and inequity 
adjustments that may be granted by the administrator among defendant 
participants. Money from insurers is front loaded for the early years 
of the fund where the most stress on the system is expected. 
Enforcement provisions have been strengthened to help the administrator 
go after recalcitrant participants.
  The new FAIR Act increases compensation going to claimants. Based on 
the funding now available under S. 2290, claims values have been 
increased in several disease categories. S. 2290 also now provides for 
reimbursement for out-of-pocket costs of physical examinations by 
claimants' physicians as well as costs for x-rays and pulmonary 
function testing at the lowest level of diseased-inflicted claimants or 
Level I claimants.
  S. 2290 establishes a new streamlined administrative structure. 
Rather than administering claims in the U.S. Court of Federal Claims, 
as was the case when S. 1125 came out of the Judiciary Committee, the 
new bill creates a new executive Office of Asbestos Disease 
Compensation within the Department of Labor, which has 90 years of 
experience in administering similar compensation programs, to process 
claims as well as manage the fund. The new administrative structure 
will be more streamlined, more efficient, less adversarial, and less 
burdensome on claimants. The program can be effectively run at a 
fraction of the cost. The application process is faster, is more user 
friendly, and is fairer to claimants. To further ease the burden on 
claimants, S. 2290 also establishes a claimant-assistance program. The 
administrator of the new office will be appointed by the President with 
the advice and consent of the Senate.
  S. 2290 ensures a quick start to processing and paying claims. S. 
2290 includes a number of new provisions that ensure the fund will be 
set up and that processing and payment of claims occurs as quickly as 
possible. Placement of the claims-handling office within the Department 
of Labor will utilize DOL's existing infrastructure and experienced 
personnel to facilitate startup. S. 2290 requires implementation of 
interim regulations and procedures within 90 days after the bill is 
enacted to allow the office to begin accepting and processing claims in 
short order. Our new bill grants interim authority to an existing 
Assistant Secretary of the Department of Labor until the new 
administrator is appointed to avoid potential delays associated with 
the appointment process.
  Lastly, S. 2290 provides for upfront funding, as early as 90 days 
after date of enactment, from fund participants, as well as increased 
borrowing authority, to ensure adequate initial funding will be 
available to fully meet demand. These new provisions are meant to 
insure that claimants will have speedy access to the fund while 
stopping any court actions in their tracks; this is to prevent any 
further, scarce resources from being siphoned away from the truly sick 
to the unimpaired claimants.
  The new FAIR Act ensures that any risk of insufficient funds does not 
fall on claimants. S. 2290 establishes a fund that can pay $114 billion 
in claims, with an additional $10 billion in contingent funding 
available from defendant participants. It also provides the 
administrator with more management flexibility and increased borrowing 
authority to be able to address any short-term funding issues.
  Under the terms of the new bill, if after 7 years it is determined 
that the fund will have insufficient resources to pay off 100 percent 
of all claims, the administrator is empowered to take actions to sunset 
the fund. In this event, S. 2290 fully protects the rights of claimants 
by creating a federal cause of action, so claimants will be able to 
pursue their claims in the U.S. District Court where they live or where 
they were exposed to asbestos.
  In closing, it is important to note that asbestos victims, American 
businesses, workers, retirees, shareholders, and the U.S. economy 
cannot afford to wait any longer for asbestos litigation reform. 
Consideration of the FAIR Act on the floor will allow what I'm sure 
will be a spirited debate and consideration of any reasonable 
amendments to our new proposal. That being said, we need move forward 
with the debate on the FAIR Act and enact S. 2290 now. I ask that my 
colleagues join me in voting to move forward on this important bill.

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