The long-debated compromise bill, aimed at settling asbestos-related claims, is now going to the US

The long-debated compromise bill, aimed at settling asbestos-related claims, is now going to the US Senate. It includes special provision for the victims of WR Grace, the notorious mining company. But it still allows the US Department of Defense exempt asabestos products "important for national security" from a blanket ban.

US Senate Panel Approves $140 Billion Asbestos Fund

Story by Susan Cornwell, Planet Ark

May 27, 2005

Washington - Legislation to create a $140 billion asbestos compensation fund was approved by the US Senate Judiciary Committee on Thursday, but there were immediate warnings it could face trouble on the Senate floor.

The committee voted 13-5 for the bill that would eliminate asbestos lawsuits and create a 30-year fund financed by companies facing litigation and their insurers. Victims could no longer sue, but would go to the fund for compensation.

Three members of the Senate's Republican majority, who supported clearing the bill from committee, warned they would insist on changes before voting for it on the Senate floor.

"I could not support this bill on the floor if it does not change," said Sen. John Cornyn of Texas. Arizona's Jon Kyl and Oklahoma's Tom Coburn echoed the sentiment.

"With the medical criteria we have here today, this fund will cost $60 billion a year (for claims)," Coburn warned. Kyl has expressed concerns about the fund's solvency, while Cornyn is worried about the allocation of expense among companies.

Asbestos fibers were used in building materials, auto parts and other products for decades, but are linked to cancer and other diseases.

Sen. Arlen Specter, the Pennsylvania Republican who chairs the Judiciary Committee and spent recent weeks making adjustments to attract votes, said he knew the bill faced continued challenges.

"We don't underestimate the difficulty of getting the bill through," said Specter, but said it had White House support.

The stocks of companies facing asbestos liabilities, which had risen strongly in recent days as the bill neared committee approval, closed mixed in trading following the vote.

Shares of bankrupt building materials maker Owens Corning closed just 3 cents higher at $4.93, while chemical maker W.R. Grace and Co.'s shares were unchanged at $11.00. USG Corp., another bankrupt building materials maker, closed down 3.1 percent at $46.84.

Many interest groups, such as insurers and some labor unions, oppose the current bill, and victims' groups dislike the fact they cannot opt out of the fund. Manufacturers and companies that acquired asbestos liabilities through acquisitions have generally been supportive.

Three Democrats joined 10 Republicans backing the bill. Sen. Patrick Leahy of Vermont, the ranking Democrat on the Judiciary Committee, thought it would pass the Senate, even though Democrats in the last Congress blocked a committee-backed version from coming up on the Senate floor.

"This is a far, far better bill , and has a far better chance of getting somewhere," Leahy said.

Some other Democrats on the committee were strongly opposed. Delaware Democratic Sen. Joseph Biden called the measure "a pig in a poke," saying there was not enough information about what companies would pay into the fund.

There were arguments in committee just before the final vote over whether to extend to other localities some special provisions for people sickened by asbestos in Libby, Montana.

W.R. Grace has been charged with conspiring to endanger the community in Libby and residents who meet special medical criteria would automatically be awarded $400,000 each.

Senators agreed that the fund's administrator would extend the special Libby provisions to other areas if a study showed similar contamination at other sites around the country that got material from Libby's asbestos-laced vermiculite mine.

But the panel rebuffed an attempt by South Carolina Republican Lindsey Graham to extend the Libby provisions without doing the study. Utah Republican Orrin Hatch said the cost of that could "kill the bill."

The disparity between treatment of Libby residents and other asbestos victims was cited by the Association of Trial Lawyers of America as a basis for a possible court challenge.

ATLA, whose members would see their attorney fees cut to five percent of awards from the fund, called the bill "underfunded, unfair, unworkable and likely unconstitutional."