Asbestos Myths and Facts...
In the debate over the Frist/Hatch Bill (S.1125) recently defeated in the U.S. Senate, a number of false allegations have been made about asbestos victims, asbestos-related companies, and the legislation itself. This sets the record straight on the most frequently repeated misconceptions since we expect the Senate to revisit this issue.

MYTH: We need the Frist/Hatch Bill because our courts are clogged with lawsuits from workers who are not sick, delaying compensation for victims who need the money.

FACT: The number of asbestos lawsuits has grown because companies willfully and knowingly poisoned millions of workers throughout the nation. Asbestos companies have caused this problem not the innocent victims who they exposed to the deadly fibers.

Only people who have been diagnosed as having an asbestos-related disease and can provide proof of exposure to asbestos fibers can get into court. According to the most recent data from the Manville Trust, a benchmark for trends in asbestos litigation, more than 85 percent of claims have been filed by injured workers with cancer, asbestosis or other severe asbestos-related illnesses.

State courts throughout the country expedite cases for asbestos victims with fatal diseases such as mesothelioma. Our state courts are well able to handle this litigation. In all state and federal courts there were only 60 asbestos trials, which involved fewer than 150 people, in 2001. About 50,000 claims were settled out of court during the same period.

MYTH: Current asbestos defendants often had nothing to do with asbestos.

FACT:  These companies used or distributed products to others knowing their asbestos content was likely to injure their own employees or others who came in contact with asbestos - mechanics, insulation installers, construction workers, office workers, and homeowners. Other defendants purchased companies, often at a discount, knowing these companies had substantial asbestos liability.

MYTH: Asbestos lawsuits have driven many asbestos manufacturers into bankruptcy.

FACT:  The companies are actually enjoying tax shelters as they pay off their asbestos liability and reorganize. They have not gone out of business, they are under the protection of Chapter 11 laws and have started all over again and are thriving.

Emory University’s John H. Harland Professor of Finance, Accounting, and Economics George J. Benston analyzed seven of the largest these asbestos companies. Based on his analysis of the seven companies’ financial statements over the five years 1998 – 2002 and projection over 2003 – 2005, he concludes: “On the whole, they essentially have increased or stabilized their sales, assets, employment, and profitability, and have projected increases. It is fair to say that they are viable and likely to be increasingly successful companies that should generate funds to exit bankruptcy significantly stronger than when they went in.”
MYTH: Current asbestos litigation is causing asbestos defendants to lay off large numbers of workers.

FACT: According to Professor Bentson’s analysis, total employment at these companies did not decline materially. Post-Chapter 11 filing employment increased at one company, Babcock & Wilcox, by 39%. Three other companies also increased their post-filing employment. Three other companies decreased their post-filing employment – the largest decrease by Owens Corning was 10%. In the case of two companies which decreased their post-filing employment, these decreases resulted form pre-filing restructuring programs and divestitures made in the ordinary course of business and were unrelated to the chapter 11 reorganizations.

All the companies met their obligations to fund employee pensions. Post-Chapter 11 filing pension contributions increased substantially from $64.5 million in 1999 to $114.6 million in 2000 to $243.2 million in 2001. Contributions went down in 2002 to $107.2 million. These contributions indicate on-going funding, rather than a onetime contribution.

MYTH:  The Frist/Hatch Bill, now before Congress, will expedite payment to victims.

FACT:  Pending settlements would be wiped out and victims would have to wait as long as ten years for money from this new untested bureaucracy. This new trust fund would face a logjam of at least 425,0000 claims in its first year, and it would take as long as two years from now for the new system to get up and running in the first place. Victims with current trials, pending court dates or appeals would also lose out as their cases and have to start at square one with the new trust fund forcing them to wait as long as eight years for compensation.

MYTH: The Frist/Hatch Bill will be fair to everyone.

FACT: The bill would actually create many inequities:

• A person who already has been promised payments by a defendant but who has not yet been paid will have to start all over. Those legal, contractual promises will be invalidated, and the victims will have to re-apply to the new bureaucracy to receive payment.
• The bill will also wipe out court dates for victims waiting to take their cases to trial.
• Victims dying of mesothelioma, typically within a year from diagnosis, will be thrown into financial chaos in their final days. Even if they are granted financial relief before they die it will be about one-third of what they currently receive on average in the courts, barely enough to cover their medical bills. Their families will have little to fall back on when they are gone.

MYTH: The Frist/Hatch Bill will cover everyone.

FACT:Victims suffering from asbestosis, a scarring of the lungs, will not receive compensation and will not be allowed to go to court. They would be cut off from any compensation unless they can obtain a certificate of medical eligibility under new ultra-restrictive criteria that are not supported by the medical literature nor by the medical community.

MYTH: Asbestos companies will pay their fair share to victims

FACT: While the Frist/Hatch asbestos bail out bill will result in delays and reduces and denies compensation to asbestos victims it gives a windfall to the corporations which poisoned them in the first place. For example, Halliburton would save $3.7 billion from the confiscation of its future asbestos trust fund. Honeywell would save $1.5 billion. W.R Grace would save $1.7 billion. In all, asbestos corporations with pending settlements would a receive $12.6 billion windfall by no longer having to compensate victims the amount they have already agreed to pay.

Updated February 25, 2007