Today, U.S. Sen. John Kennedy [R-LA], will spend part of his day at a Senate Judiciary Committee hearing titled, “The Impact of Lawsuit Abuse on American Small Businesses and Job Creators.”
As Louisiana's junior senator knows, there are few more serious threats to Louisiana’s business community, or to the U.S. economy, than abusive lawsuits. They stifle innovation, kill jobs, increase the cost of health care and other services and prevent our legal system from addressing legitimate issues.
U.S. Sen. John Neely Kennedy (R-LA)
One stunning example of this is the rampant abuse and lack of transparency that exists throughout our bankruptcy trust system.
These trust funds were set up by our courts and financed by the assets of more than 100 companies bankrupted by asbestos-related lawsuits. Over the last decade, these asbestos trusts have paid more than $17 billion to veterans, shipyard and factory workers and others impacted by mesothelioma, asbestosis and other illnesses related to asbestos exposure.
Sadly, and largely as a result of allowing personal injury lawyers to oversee them, these trust funds have become rife with abuse. Bad actors rip off the trusts by claiming they worked places they didn’t or by filing for payments from multiple trust funds, even though they are only due money from one. As a result, there is less money available for truly impaired people entitled to payments from the trusts.
Such fraud occurs because there is no transparency or oversight when it comes to asbestos trust funds. In many instances, the same plaintiffs’ attorneys who profit from these trusts are responsible for managing them, in essence allowing the fox to guard the henhouse. Furthermore, a lack of coordination between the trusts and the tort system provides for the unseemly practice of “double dipping” — whereby some attorneys file conflicting claims about their clients’ asbestos exposure and collect multiple awards from different trusts and companies for a single asbestos-related injury.
Fortunately, Congress is currently considering legislation that would expose scam artists and protect Americans who have a legitimate claim to compensation related to asbestos exposure.
The bill, known as the Furthering Asbestos Claims Transparency (FACT) Act, will bring sorely needed transparency to this process and help protect veterans and others sickened by asbestos by requiring trust funds to disclose information on claims made to the trusts while taking measures to protect claimants’ personal information. By weeding out bad actors who are abusing the current system, the FACT Act will preserve existing funds and ensure all deserving future claimants receive maximum relief for their illnesses and injuries.
To be sure, the FACT Act does not limit payments or prevent asbestos claimants from receiving payouts from multiple sources. Indeed, there may be some instances where veterans or industrial workers were exposed to several different asbestos-containing products throughout their years of service. The bill simply requires disclosure of that information to the courts for judges and juries to consider when compensating asbestos claimants.
When looking for ways to clean up America’s legal system, there is no better place to start than the FACT act. I urge Sen. Kennedy to support these much-needed, common sense reforms.