HARRISBURG - The Fairness in Claims and Transparency Act, designed to add transparency to the Pennsylvania asbestos recovery system and follows legislation proposed around the country, is awaiting action by the House Judiciary Committee.
The bill, introduced by Rep. Warren Kampf, addresses a long-standing issue with the current system of assessing responsibility for damages in asbestos-related suits by requiring plaintiffs in civil lawsuits to disclose the exposure claims they've also submitted to bankruptcy trusts.
The bill was originally introduced in 2013. This version was introduced in June but has not moved despite a Republican majority in the House..
Trusts are established by companies that have dwindling resources to compensate those suffering from mesothelioma and other asbestos-related diseases and are a part of the bankruptcy system.
Under the terms of the trust, companies can’t be litigated against directly because the trust exists to pay claims.
Billions of dollars have been awarded to victims in this way. However, other companies can be the subject of lawsuits.
“The asbestos claims system is a lot different than other litigation,” Kampf told the Pennsylvania Record. “Claimants who have mesothelioma, through a very short and fairly easy process, can recover from the trust without even proving causation.”
As the Garlock Sealing Technologies bankruptcy case revealed in a judge's 2014 decision, some trial lawyers are taking advantage of the system by delaying trust claims in order to assess more responsibility to companies in lawsuits.
Garlock introduced evidence from 15 cases and also filed racketeering lawsuits against the asbestos firms that filed them. One of those firms is the Shein Law Center of Philadelphia.
“When the claimant then sues another company, a peripheral defendant … the claims that were made in the trust system are really never before the jury and the judge, they don’t get on the verdict sheet,” Kampf said.
This puts a heavy burden on businesses that might bear very little actual responsibility, Kampf said.
In most areas of law, the Fair Share Act would address this issue by eliminating joint and several liability.
“In asbestos claims, fair share does not really apply, and the courts have held as much,” Kampf said. “It can be very difficult to get the lawyers who represent these claimants to turn over claims that they have made on the bankruptcy trust systems, and it’s very hard to get the trusts to release claims.”
The state's FACT Act would change that by requiring plaintiffs to disclose all exposure information and any claims previously filed based on asbestos exposure. They also must disclose if they are eligible to submit a claim to a trust.
The bill will also apply the 2011 Pennsylvania Fair Share Act to asbestos cases to eliminate joint and several liability.
“It’s a good bill,” Kampf said. “It doesn’t prevent anybody from making any claim against any entity or any trust, but it tries to avoid a situation by which the system is gamed.”
The goal is to create a more favorable environment for businesses in Pennsylvania, Kampf said.
“In my mind, the bill is fundamentally about trying to implement a Fair Share Act for this particular type of case,” Kampf said.
Similar federal legislation was recently passed by the House of Representatives, and President Barack Obama has promised a veto if it makes it through the Senate.
Also, some states - like neighboring West Virginia - have passed their own asbestos trust claims transparency laws.