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On April 19, Senator Arlen Spector, R-Pa., joined by seven of his colleagues, both Democrats and Republicans, introduced S. 852, the Fairness in Asbestos Injury Resolution Act of 2005, the latest effort to clean up the mess caused by the massive use of asbestos for many years after its dangers were known to its manufacturers, but not to workers exposed to it. By a vote of 13-5, the Senate Judiciary Committee reported out an amended bill in late May. Although there are a number of tough issues to resolve before the bill can be enacted, there are two serious flaws that directly harm asbestos victims and should be fixed no matter how these other questions are decided. S. 852 would eliminate virtually all existing and future cases, in both state and federal courts, including the bankruptcy courts to which companies have been flocking recently to deal with their asbestos claims. It would create a fund, run by an administrator in the U.S. Department of Labor, into which the companies and their insurers would make payments totaling up to $140 billion over 30 years. The bill specifies nine diseases, based on specific medical criteria, that make a claimant eligible for payments, with the amounts set by a schedule, indexed for inflation. Claimants would not have to show negligence-only substantial exposure to asbestos. Companies already in bankruptcy would transfer their asbestos-related assets into the fund, and the claimants would be paid exclusively by the fund instead of as provided in previously negotiated bankruptcy plans. Most significantly, those claimants who would receive modest payments because of a condition known as pleural thickening-which can be seen on X-rays of their lungs, but does not impair their activities-would no longer be eligible for cash payments, although they would be entitled to a free medical exam, a chest X-ray and a pulmonary function test every three years. The bill recognizes that filing a claim is not a simple matter, and so it quite sensibly provides that there will be government personnel to help claimants with their applications, including answering legal questions. It also envisions panels of pro bono lawyers, perhaps relying, unrealistically, on what happened after 9/11. Because of the complexity of these cases, and because compensation can reach $1.1 million for injuries that are almost certain to cause death, some claimants will choose to retain lawyers. The problem is that S. 852 limits attorney fees to 5% of the amount recovered, which means that almost no lawyers will be willing to take any but the most serious cases, and perhaps not even those. Given the lawyer-bashing of the Republican Party, and the fact that so many plaintiffs’ lawyers support the Democrats, it is not surprising that some of the sponsors saw this as an opportunity to strike back at the plaintiffs’ bar. But the real victims will be the claimants who will not be able to find lawyers to handle their cases and therefore have to settle for much less than they deserve. Strike the fee cap To put this cap in perspective, existing federal law limits fees for lawyers in Social Security disability cases to 25% and in veterans’ cases to 20%. Although there is no perfect number, or even a perfect sliding scale of fees, the 5% figure is so low that virtually no victim will be able to retain counsel. Congress should strike the fee cap and either allow the administrator to impose a reasonable one by rule, if the need arises, or devise a reasonable sliding-scale fee schedule, instead of the punitive one now in the bill. The second major flaw stems from the provision that the entire cost of operating the fund, all of the medical monitoring and a variety of multimillion-dollar research programs that the bill requires will be paid for from the money available for claimants. What this will likely mean is that, if (and some say when) the fund runs out of money, the last victims will get less or even nothing, because a billion dollars or more will be used for purposes other than to pay injured workers. Ideally, the defendants should pay for all of this, but the next best solution is for the federal government to do so. First, a major source of exposure to asbestos was the World War II shipyards, yet the government has never paid for harms from asbestos. Second, one of the reasons behind this legislation is to relieve the courts, increasingly the bankruptcy courts, from the burden of asbestos litigation. It seems entirely reasonable for the government to take these savings, plus whatever else it will cost, to pay the expenses of operating the fund. Claimants didn’t have to pay for the courts when they filed their lawsuits, and there is no reason for them to have to pay for the administrative system that S. 852 will establish to replace those courts. And if those costs are not complete offsets, the U.S. Treasury will be far better able to pay for them than the victims. If, as the preamble to the bill proclaims, passage is in the interests of all Americans, then all of us should pay to run this program and not force the victims to bear the entire cost. Alan B. Morrison is a senior lecturer in law at Stanford Law School.

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