Today, the U.S. House of Representatives will be voting on H.R. 982, the Furthering Asbestos Claim Transparency (FACT) Act of 2013. The FACT Act would provide much needed transparency to the asbestos personal injury compensation system and is supported by a broad segment of the business community including the Business Council of Alabama.
In the 1990s, the United States faced what the Supreme Court called an “asbestos-litigation crisis” where companies facing massive liability claims filed for bankruptcy and closed, costing jobs and leaving the truly sick without fair compensation. As a result, Congress amended the Bankruptcy Code in 1994 to allow for the resolution of asbestos liability claims against a debtor through a trust-based system. The trust system helps to ensure that current and future asbestos victims will be fairly compensated and allows companies to continue operations. However, the trusts operate without transparency and are susceptible to fraud and abuse.
The onslaught of asbestos-related litigation has forced solvent small businesses, manufacturers, and others, many of which never manufactured or sold asbestos, into bankruptcy. These closings have devastating trickle-down impacts on towns and businesses, affecting everything from real estate values to tax receipts, which is why Congress must address this problem.
The FACT Act would discourage litigation abuses and protect asbestos trust funds from fraudulent claims that may otherwise leave the trusts unable to compensate legitimate asbestos victims. This legislation would require asbestos personal injury settlement trusts authorized by federal bankruptcy law to disclose information on their claims on a quarterly basis and respond to information requests from parties to asbestos litigation. This legislation will deter fraud without affecting legitimate claims.