WASHINGTON — A bill aiming to promote transparency and access to information regarding asbestos claims was recently passed in the U.S. House of Representatives and has now been handed over to the Senate.
The Furthering Asbestos Claims Transparency (FACT) Act, also known as H.R. 1927, was introduced into the Senate on Jan. 11 after it passed the House by a 211-188 vote a few days earlier. Previous versions of the FACT Act have been passed in the House in recent years, but unsuccessful in the Senate.
The measure is largely favored by Republicans; and because Republicans are in the majority in the Senate, the bill may have a greater chance of making it through the Senate this time around.
The FACT Act seeks to eliminate exploitation of asbestos claims by plaintiffs’ lawyers who help their clients double-dip by filing claims in civil courts and with bankruptcy trusts.
Many organizations have rallied behind the measure.
“Today, it is estimated more than 60 different bankruptcy trusts have been established to collectively form a $40 billion privately funded personal injury compensation system for asbestos victims,” Brian Landry, vice president of Political Action at the Louisiana Association of Business and Industry (LABI), recently told the Louisiana Record. “Currently, the system operates with very little oversight, and a lack of coordination between the trusts and the tort system allows asbestos claimants to double dip —or recover twice for the same injury."
LABI and other supporters see the FACT Act as a way to stop the double-dipping.
"When opportunistic personal injury lawyers and their clients bring false or exaggerated claims to these trusts, they take assets from deserving victims— and that’s just wrong," Landry said. "The FACT Act will discourage this kind of abuse by shining a bright light on the trust system.”
Under the FACT Act, asbestos trusts are required to file reports on their public bankruptcy dockets quarterly. The reports will provide basic information on each demand the trust receives from claimants and the basis for any payout to the claimant.
The trusts also would be required, upon written request and at the requesting party’s expense, to provide information regarding demands and payments made.
Because the measure requires disclosure of information on asbestos victims, those who oppose the FACT Act say the provisions would violate privacy and increase the likelihood of identity theft. Opponents also believe the bill will further delay compensation, which often comes too late for asbestos victims who are seriously ill.
Those who support the legislation say it is designed to ensure that the money in the trust funds is reserved for asbestos claimants entitled to compensation by law, and to protect trust funds from fraudulent claims and inflated payouts.
“The FACT Act is common-sense legislation that strikes the right balance between transparency and privacy," Landry said. "By requiring claimants to disclose basic information about any other claims they may have against bankruptcy trusts, the FACT Act will help prevent double dipping and preserve funds for future asbestos victims."
Landry said he believes additional legislature is necessary in Louisiana to complement the FACT Act.
“After more than 40 years, asbestos litigation is now the longest-running mass tort in U.S. history, and it is clear that the billions of dollars involved in this sector of litigation have attracted a large number of questionable claimants,” he said.
Landry also stressed that those who abuse the system are hurting those who really need assistance.
“As this litigation has expanded and evolved, some states, including Louisiana, have struggled to pass reforms that can help prevent fraud and abuse, and ensure that the real victims are properly compensated," Landry said. "Unfortunately, this abuse can delay the process of recovery for existing asbestos claimants and unnecessarily deplete the amount of resources available to future claimants.”
LABI has supported numerous bills in recent legislative sessions that would prevent fraud and improve transparency in asbestos litigation, Landry said.
“Until we have a fair and transparent system that guards against fraud and protects asbestos assets for legitimate victims, we will continue to support these efforts at the state and federal level," he said.
LABI serves as Louisiana's state chamber of commerce, and advocates for business interests through legislative lobbying and political action.