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House Judiciary Committee Approves FACT Act to Combat Asbestos Lawsuit Abuse

May 14, 2015
Washington, D.C.—The House Judiciary Committee approved H.R. 526, the Furthering Asbestos Claim Transparency Act of 2015 (FACT Act), by a vote of 19-9. The FACT Act reduces fraud in the asbestos bankruptcy trust system through increased transparency measures. These measures ensure that asbestos bankruptcy trusts have the tools to combat fraud, which limits funds available for asbestos victims. The FACT Act is a measured approach that strikes the proper balance between achieving transparency and protecting victims’ privacy. Similar legislation passed the House of Representatives with a bipartisan vote last Congress. Chairman Goodlatte applauded the Committee’s passage of the legislation, and the leadership taken by Regulatory Reform Subcommittee Vice-Chairman Blake Farenthold (R-Texas). Chairman Goodlatte: “The Committee’s passage of the FACT Act is a major step towards helping those asbestos victims who must look to the bankruptcy process to seek redress for their, or their loved ones’, injuries. The FACT Act increases transparency in the Bankruptcy Code in order to protect the finite funds available to compensate asbestos victims while still protecting their privacy. The FACT Act is a measured reform that strikes the proper balance between introducing much-needed transparency in the asbestos bankruptcy trusts system and protecting the privacy of individual claimants.” Congressman Farenthold: “The passage of this bill will help stop the reduction in asbestos trust payouts – many of which have been reduced by more than 50 percent – that disproportionately hurts victims, especially our veterans who bravely put their lives on the line. Every dollar taken through double-dipping or unscrupulous legal practices is a dollar less for those victims who face mesothelioma and other asbestos related illnesses. The FACT Act will shine sunlight into the opaque asbestos trust system to fight this fraud and abuse.” Details of the FACT Act
  • Requires the asbestos trusts to file quarterly reports on their public bankruptcy dockets.  These reports will contain very basic information about demands to the trust and the bases for payments made by the trusts to claimants.
  • 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.
  • Asbestos trusts would be required to respond to information requests about claims asserted against, and bases for payments made by, the asbestos trusts at the expense of the requesting party.
  • Structured to minimize the administrative impact on asbestos trusts.
  • 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 bases for their claims, and the bases for any amounts paid to claimants.  This would all parties, including state courts and asbestos bankruptcy trusts, to compare claims and prevent fraudulent or duplicate filings.