AAI Urges Congress to Act on Asbestos Litigation Crisis

The Alliance of American Insurers (AAI) has told the Senate Judiciary Committee that asbestos represents a “national crisis requiring a national solution.”

In written comments submitted for the record of today’s committee hearing on asbestos litigation, the Alliance told the committee that our nation’s economy is facing an asbestos litigation crisis that affects its overall health, including its manufacturing and insurance segment.

“This crisis is caused by a litigation system that fails to protect those who are truly sick and injured by asbestos exposures while at the same time encouraging claims by those who are not physically impaired,” Kenneth Schloman, Alliance Washington counsel, commented. “Too often, defendants are placed in the unenviable position of being forced to settle claims — including those of the unimpaired — or bet the company on the outcome of a jury trial in a jurisdiction hand-picked by plaintiff counsel.”

The Alliance noted that the actuarial consulting firm Tillinghast-Towers Perrin estimated that the eventual costs of resolving asbestos claims could exceed $250 billion. As a result, all lines of insurance may ultimately be impacted by the asbestos litigation crisis.

The American Bar Association (ABA) has now reportedly recognized the inequity of the current asbestos litigation system. The ABA House of Delegates recently adopted medical standards regarding asbestos claims, and recommended that these standards be included in new legislation designed to resolve the asbestos litigation crisis.

The Alliance told the committee the “Asbestos Claims Criteria and Compensation Act of 2003,” S. 423, was a good starting point to resolve the crisis. Sen. Don Nickles (R-Okla.) introduced the measure Feb. 13 to address medical criteria and other issues. The bill would protect the rights of individuals with demonstrated asbestos exposure — but who do not show physical impairment — by modifying the statute of limitations, and by placing these persons on an inactive docket.

This concept represents an effective and reasonable way to assure adequate funds for the impaired without prejudicing the rights of the unimpaired, according to Schloman.