October 28, 2003


The Honorable William Frist
Majority Leader
United States Senate
Washington, D.C.  20510

Dear Majority Leader Frist:

We would like to commend you on your efforts to create a national asbestos trust fund.  We remain committed to working with you, Senator Hatch, and other colleagues to develop a truly bipartisan solution to the asbestos litigation crisis.  Our nation continues to grapple with the terrible consequences wrought by the use of asbestos.  With each passing day, more and more victims face serious illness and even death, and more and more workers and companies face the threat of bankruptcy.

In this endeavor, we have long believed that there is overwhelming bipartisan support in the Senate to achieve the same goals:  fair compensation to all victims of asbestos exposure and reasonable financial certainty to defendant companies and insurers.

Creating a national asbestos trust fund is an extraordinarily complex undertaking.  There are numerous issues that all sides agree must be addressed: the creation of a no-fault administrative system, the equitable allocation of contributions, the establishment of reasonable medical standards, and compensation values which must be fair, expeditious, and transparent to both victims and corporate stakeholders alike.

We appreciate your efforts in bringing about the “agreement” between defendant companies and insurers.  What was presented had several promising provisions, including: extending the borrowing authority of the fund administrator and increasing compensation values in some disease categories.  However, as you know, this latest industry position does not reflect input from victims of asbestos exposure, including those represented by organized labor.  For this reason, it is inadequate in several important areas.  These areas must be resolved for a meaningful solution to this problem to be found.   

Inadequate Funding Levels.  Information provided by your office indicates that the unified industry position envisions contributions of $104 billion over years 1 through 22 plus $10 billion in contingency funding available, if needed, in years 23 through 27 of the program.  While we have been told that there is some additional funding available, that conclusion is unclear on the basis of the information provided.  In any event, however, there is compelling evidence that these contribution amounts fail to cover the costs of expected disease claims at fair compensation values.  As you know, the Congressional Budget Office estimates that S.1125, as reported out of Committee, would on an average incidence case basis require a trust fund of  $136 billion. Other scenarios envision a trust fund of an even larger size.  For that reason, to ensure solvency of the fund, the Committee unanimously agreed to contingent funding of up to $45 billion, in addition to $108 billion of mandatory funding.  If we understand the unified industry position correctly, it removes up to $35 billion of contingent funding from S. 1125 as reported, as well as potentially decreasing the overall funding.  The removal of this funding could have a detrimental impact on the solvency of the fund.  We noted that you had stated this level of funding was a “final offer,” and therefore not likely to be negotiated.  Given the concerns that we have consistently raised regarding fair compensation and the overall funding, such a position would make it difficult, if not impossible, to reach agreement on this important issue.  If, instead, this issue is still open to discussion, we urge you to provide greater clarity.  

Fair Claims Values.  The claims values inadequately compensate victims of asbestos exposure.  While the proposed values are greater than S. 1125 as reported out of Committee, we believe that the dollar amounts fall short of fair compensation to those who have become sick or have died as a result of asbestos exposure. We continue to believe that the values laid out in Committee by the Leahy-Kennedy amendment represent fair compensation and deserve consideration.

Just Administrative System.  The latest industry position does not address any concerns about  the establishment of an operational administrative system for a national asbestos trust fund.  An effective, no-fault, non-adversarial system for assessing and  processing compensation claims is as vital to the success of this legislation as ensuring adequate funding and fair compensation values, since if the claimants are unable, in a timely and efficient manner, to obtain the awards to which they are entitled, the fund will fail. 

Additional Unresolved Issues.  The latest industry position also does not address numerous unresolved issues including the disposition of pending claims, finality/solvency, the exclusion of  FELA-covered employees, eliminating subrogation and providing medical screening for high-risk workers. 

Time is short.  We stand willing to work with you and others to address the issues detailed above.  We believe that, through good faith negotiations that consider the needs of the victims and of the affected industries, fair solutions can be achieved.  We urge you to convene a bipartisan process, at the earliest possible time, in order to resolve these outstanding issues.

We continue to believe that if we work together, we can develop effective reform legislation to provide appropriate compensation to the victims of asbestos exposure while at the same time promote a sound economy.


 Tom Daschle           Patrick Leahy      Christopher Dodd