Committee Approves Bill to Strengthen Asbestos Trust System

Washington, D.C. - The House Judiciary Committee today approved legislation to strengthen the Asbestos Trust System by promoting transparency that will combat the fraud and abuse that currently besets the system. Chairman Bob Goodlatte (R-Va.) and Regulatory Reform, Commercial and Antitrust Law Subcommittee Vice Chairman Blake Farenthold (R-Texas), chief sponsor of the Furthering Asbestos Claim Transparency Act (H.R. 982), praised the Committee vote.

Chairman Goodlatte: “The FACT Act is common-sense legislation that is designed to promote transparency, discourage fraud, and ensure that funds meant to benefit legitimate future asbestos victims are not used to pay abusive claims.  If asbestos trusts are to have assets available to pay the claims of deserving future claimants tomorrow, Congress must take steps to assure that trust assets will be better protected today.” 

Subcommittee Vice Chairman Farenthold: “The FACT Act was carefully crafted to ensure both current and future victims of asbestos exposure are not left without compensation for their injuries because of abuses of the trust system.  We must preserve the funds for victims and their families. This legislation strikes the right balance of transparency and privacy-and I am proud to have worked on something that is going to help these people get the financial support they need and deserve.”   
 
Background: Currently, asbestos trusts operate under strict rules and rarely share claims information with one another, let alone tort litigants or the public.

With roughly 60 asbestos trust funds and nearly $40 billion in assets, opportunistic individuals are able to file conflicting claims with numerous trusts and within the state court tort system, seeking multiple payouts.

The FACT Act amends Section 524(g) of the Bankruptcy Code to require asbestos trusts to file quarterly reports with the bankruptcy court that detail claimants’ names, the amount paid to each claimant, and the basis for such payment.  This would allow parties to compare claims and prevent fraudulent or duplicate filings.

Information regarding today’s markup can be found here.