Asbestos Bankruptcy Trusts Running Short of Money to Pay Future Claimants, System Lacks Safeguards
Institute for Legal Reform released a report highlighting the depletion of asbestos bankruptcy trusts, jeopardizing their ability to fully compensate future claimants.
The trusts lack safeguards to preserve assets, spend very little to verify the legitimacy of claims and do not have contingency fee caps, allowing lawyers to collect up to 40 percent of claims paid out.
In March of 2017, the U.S. House of Representatives passed the “Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency (FACT) Act of 2017” (H.R. 985). The FACT Act portion of the bill reduces “double dipping” claims against the trusts and in the tort system by requiring the trusts to report quarterly on who files claims. The system works to ensure money is held in the trusts for future victims, while protecting individuals’ personal information just the same as the courts do.
In March of 2018, Senators Tillis, Grassley and Cornyn introduced the PROTECT Asbestos Victims Act to provide “much-needed oversight of asbestos bankruptcy trusts to ensure victims receive just compensation.”