U.S. Government Accountability Office Report Examines the Asbestos Trusts System
The Government Accountability Office recently released a new report, which analyzed the multi-billion dollar asbestos injury trust system. The GAO conducted this study to examine the trust distribution procedures under the federal bankruptcy code. Asbestos litigation arose out of wide scale asbestos exposure which caused millions of Americans to develop malignant and nonmalignant diseases including mesothelioma, lung cancer and other types of cancer. Describing asbestos as “a sound absorption and fire resistance fibrous mineral”, the government report lists the following as a non-exhaustive list of asbestos-containing products:
- Attic and wall insulation.
- Steam pipes, boilers, and furnace ducts insulated with an asbestos blanket or asbestos paper tape.
- Vinyl floor tiles and the backing on vinyl sheet flooring and adhesives.
- Asbestos paper, millboard, or cement sheets used to protect walls and floors around woodburning stoves.
- Door gaskets in furnaces, wood stoves, and coal stoves.
- Soundproofing or decorative material sprayed on walls and ceilings.
- Patching and joint compounds for walls and ceilings, and textured paints. • Asbestos cement roofing, shingles, and siding.
- Artificial ashes and embers sold for use in gas-fired fireplaces.
- Fireproof gloves, stove-top pads, ironing board covers, and certain hairdryers.
- Automobile brake pads and linings, clutch facings, and gaskets.
About 100 companies linked to asbestos have declared bankruptcy – allowing them to transfer liabilities and certain assets to an asbestos personal injury trust. These trusts are responsible for compensating present and future claimants out of a multi-billion dollar asset pool.
The Government Accountability Office analyzed trust payment data from 1988 through 2010, which showed that the trusts had paid about 3.3 million claims valued at $17.5 billion. Trusts have different procedures that govern the process for evaluating claims and distributing compensation. These trusts usually publish financial reports which show the total annual number of claims and compensation paid to claimants for asbestos related injuries, such as mesothelioma. However, the reports do not include individual claimant’s identity or exposure history.
There are opposing views as to whether trusts should be required to disclose more information on the trusts and its claimants. The trusts and plaintiffs believe that the information should be kept confidential due to the costs of reviewing and producing the information, which would come out of the trust that is intended to pay future claimants with asbestos related diseases. A representative from one of the trusts indicated that producing claimant information could cost $1 Million. Business would like the information produced to reduce their litigation costs and to ensure that plaintiffs are being consistent on each claim submission to various companies.
If you or a loved one have mesothelioma or an asbestos-related injury and would like more information about a possible claim, please contact us at 1-800-374-2144 or use the “Email Us” form on the left side of this page.
Source: United States Government Accountability Office, Asbestos Injury Compensation: The Role and Administration of Asbestos Trusts; Report to the Chairman, Committee on the Judiciary, House of Representatives, September 2011