Facts on the FACT Act
Last week, the U.S. House Judiciary Committee favorably reported the Furthering Asbestos Claims Transparency (FACT) Act of 2012. The FACT Act is common-sense, bipartisan legislation that would simply require the personal injury settlement trusts established by bankrupt asbestos lawsuit defendants to file quarterly reports with the bankruptcy courts that describe their claims. It would also require trusts to respond to still-solvent asbestos litigants’ requests for information on claims. Opponents of the FACT Act contend that it is unnecessary because there is no evidence of widespread fraud in the trust system and that the bill would somehow diminish victims’ rights. They’re wrong on both counts.
First, independent experts at the Government Accountability Office and RAND Institute for Civil Justice have studied the trusts and concluded they are susceptible to abuse. This isn’t a purely academic or theoretical concern as opponents of the bill claim. Specious claims against trusts have emerged throughout the country, and witnesses at hearings held by the Committee detailed questionable trust claims exposed in the course of litigation in Louisiana, Maryland , New York, Ohio, Oklahoma, and Virginia. Indeed, a judge in Delaware recently raised serious concerns over the inconsistent claims being advanced by asbestos lawyers by noting that “the core of this case has been fraudulent.” Unfortunately, this may be just the tip of the iceberg. By shedding light on the claims filed against the trusts, the FACT Act will simultaneously deter and allow the detection of questionable claims.
Second, counter to the misinformation of its opponents, the FACT Act would strengthen victims’ interests. The legislation requires trusts to share information that would normally be publicly available, like names and alleged exposure histories. It preserves asbestos victims’ ability to file legitimate lawsuits or trust claims, and it protects individuals’ privacy by prohibiting the release of confidential medical records, social security numbers, and other personal information protected by existing bankruptcy laws. Furthermore, the bill’s reporting requirements would ensure that trusts have sufficient funds to pay legitimate claims by rooting out fraud in the system. To claim otherwise is simply smoke and mirrors.
The bottom line? The FACT Act is simple legislation that would make the asbestos trust system more transparent and benefit legitimate asbestos victims.