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Asbestos Fund Unlikely This Year

May 19, 2004

Hopes for a deal establishing a national trust fund to help victims suffering from asbestos-related illnesses are slim following the collapse of mediated talks among legislators and representatives of workers, insurers and companies who produced the cancer-causing material.

The breakdown comes a year after the start of negotiations to establish a pool of money to settle claims of workers suffering from disease and illness after inhaling asbestos. The once-popular substance was used for many years in a variety of products as fire-resistant insulation. The total cost of lawsuits, past and future, has been estimated at $275 billion.

Each side has an interest in reaching an agreement on a uniform system for bringing claims and making payouts to injured parties. Today, workers have recourse in courts, though years of litigation has resulted in millions awarded to single plaintiffs, bankrupting defendant companies and becoming a major liability for insurance companies. The trust fund would consist of a pool of money paid by the responsible companies; claimants would waive their right to the courts to participate in the civil justice system.

"Giving up your legal rights is always a scary thing so people want to make sure its the right compromise," said IBEW International Representative Liz Shuler.

The two weeks preceding the May 7 impasse consisted of intense negotiations mediated by a former federal judge who was brought in by Sen. Arlen Specter (R-PA).

Ultimately, squabbling among the companies who would contribute to the fund sunk the deal, Shuler said. But adding to the impasse was the contention by labor groups that the $124 billion pool was not adequate to fund fair compensation values for victims. Indeed, a Congressional Budget Office report estimated that the bill as structured would collect only $118 billion. The AFL-CIO predicted the fund could face financial insolvency and collapse within a few years at the level of funding proposed by business.

"People feel its too political a topic to achieve a meaningful compromise during an election year so the program will probably not be achieved until next year," Shuler said.

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