The asbestos mess

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When the Senate Judiciary Committee's 10 Republican members voted in May to send asbestos-trust-fund legislation to the Senate floor, they signaled two things: that a trust fund is the best a Republican Congress can do to solve the asbestos-litigation mess, and that the last best hope for victims and beleaguered businesses is to crack down on litigation fraud. Senate Republicans should pass this bill, but there are glaring problems they must first address. Senate Majority Leader Bill Frist vowed to send the measure to the floor after the August recess. The House has yet to consider the issue. President Bush supports the Senate bill. But no one is entirely satisfied with it.

The Senate envisions a trust fund of $140 billion paid for by defendant companies and their insurers. The fund would compensate the thousands who suffered injury or death after handling the compound in factories and shipyards or suffering from its installation in buildings prior to the 1970s. Currently, the asbestos mess is handled in courts, often by unscrupulous trial lawyers, where litigation to date has cost more than $50 billion. This has driven many companies into bankruptcy and has encouraged fraudulent lawsuits.

As leading asbestos-litigation expert Lester Brickman told Mr. Bush in January at a Michigan town hall meeting: "Out of approximately 850,000 claimants since asbestos litigation began, perhaps 600,000 of these are largely baseless claims." Mesothelioma and asbestosis, the two most common asbestos diseases, have long latency periods -- usually 15 to 30 years -- but in 2003 more than 110,000 new claimants surfaced, the most ever. In April Tom Donohue, head of the U.S. Chamber of Commerce, called on the Justice Department to probe "substantial and systemic fraud" in asbestos litigation.

Such fraud threatens to upend the trust fund, the primary reason why Senate Judiciary Committee members Jon Kyl, Arizona Republican, John Cornyn, Texas Republican and Tom Coburn, Oklahoma Republican, voiced reservations when voting to send it to the floor. Mr. Coburn said he would not vote for the trust fund unless these problems are fixed. "We're giving false hope," he said. "This bill as written will fail in year three, four or five." He fears that the $140 billion will be exhausted. That would leave taxpayers on the hook to subsidize the trust fund or, almost as bad, return the issue to the courts, where companies looking to put bankruptcy behind them would face another seemingly endless stream of payouts.

The best way to plug this hole in the trust fund would be through tort reform, of course -- if the Republican Congress can ever bring itself to tackle the issue.