Senate Legislation Would Worsen Asbestos Woes
The asbestos issue has had many ill effects on individuals, the legal system, and the economy, but the U.S. Senate’s proposed cue is simply unworkable, according to a study released late last year by NTU.
“Our society and economy desperately need a solution to the asbestos crisis, but giving trial lawyers the equivalent of a taxpayer-backed paid holiday so they can find more clients to clog the system is no remedy,” said study author and NTU Policy Analyst Jeff Dircksen.
Asbestos, once a common ingredient in many manufactured products, has since been shown to cause severe diseases. However, the court system has become overwhelmed by a flood of injury lawsuits (many of them bogus) from some 730,000 claimants, causing over $300 billion in lost national economic productivity and agonizing waits for truly deserving victims.
Supporters of S. 852, the Fairness in Asbestos Injury Resolution (FAIR) Act, believe the bill offers the best approach to the flood of claims for asbestos health problems, by creating a federally-administered trust fund capitalized by insurers and firms that made or utilized asbestos. However, Dircksen contends that the legislation is filled with pitfalls, such as:
- Victims to see additional delays. Challenges to the constitutionality of the trust fund could delay its initiation, giving the trial bar more time to overwhelm the system with claims and force cases back into the courts (where attorney fees would be more lucrative).
- Small business protections paltrier than advertised. Firms that have worked to protect themselves from liabilities would be stripped of their insurance assets and forced to “contribute” to the new fund. Many small businesses, already struggling under taxes and regulations, would pay a proportionally larger share of their revenues than major firms.
- Taxpayers would be left with billions in additional debt. S. 852 assumes (but does not mandate) that participants will contribute $140 billion to the trust fund over its 30-year life. Yet, both the funding and expense scenarios under S. 852 are unrealistic – the trust fund could be broke in five years or less, resulting in the reversion of claims to the legal system or a massive infusion of taxpayer cash (between $45 billion and $450 billion).
Peter Sepp is Vice President for Communications at the National Taxpayers Union
www.ntu.org
Copyright 2007. All Rights Reserved.
