Bush Calls for Asbestos Lawsuit Reform

CLINTON TOWNSHIP, Mich. – Claiming that asbestos (search) lawsuits clog the courts and cost jobs, President Bush urged Congress Friday to change the way people are compensated for illness caused by the deadly material. "The system isn't fair right now," Bush said.

"It's not fair to those who are getting sued and it's not fair for those who justly deserve compensation," said Bush, appearing at a performing arts center here, just north of Detroit. He claimed that companies have been forced into bankruptcy because of asbestos-related litigation that has cost the nation about $80 billion — the majority of which is not seen by victims but swallowed up by legal and processing fees.

"These asbestos suits have bankrupted a lot of companies and that affects the workers here in Michigan and around the country," said the president, sitting in front of a prop that displayed the scales of justice and the message "Ending Lawsuit Abuse."

"Those with no major medical impairment now make up the vast majority of claims while those who are truly sick are denied their day in court," the sign said.

The American Trial Lawyers Association (search), however, says many of the companies that filed for bankruptcy were reorganized, not liquidated, and that few cases filed in court actually go to trial. Association President Todd Smith said Friday that Bush should spend time with patients suffering from asbestos-related diseases that kill more than 300,000 workers who have died from asbestos exposure.

"Sadly, we doubt the president will meet with any asbestos victims," Smith said. "Rather, he'll once again meet with the asbestos and insurance industries which are fighting as hard as they can to avoid being held responsible for this national health epidemic."

Smith also called on Bush to support legislation proposed by Sen. Patty Murray (search), D-Wash., calling for a ban on the importation and use of asbestos.

While the president did not back specific legislation, he urged lawmakers to make sure that compensation is received by those who are sick, not lawyers and claimants who are not ill. Bush also urged Congress to find ways to protect third parties — companies that he said have nothing to do with causing asbestos illnesses — from lawsuits.

"Most of the asbestos producers are now bankrupt so that lawyers target companies - once considered to be too small to sue, or once considered to be not directly involved in the manufacture of asbestos," Bush said. "Because there's nobody else to sue, they try to drag in people who aren't directly involved in the manufacturing of asbestos."

The Environmental Working Group, a Washington-based environmental research group that opposes Bush's proposed changes, says asbestos is a public health, not bankruptcy crisis. Halliburton is the latest company to "emerge" from asbestos bankruptcy proceedings, the group says.

In July 2004, the Houston-based Halliburton Co. won court approval for a $4.2 billion plan for settling asbestos-related health claims. A judge signed a Chapter 11 bankruptcy restructuring plan for several of Halliburton's key business units. The judge's action was one of the final hurdles before Halliburton subsidiaries, including KBR and DII Industries, could emerge from bankruptcy. They still must fund a trust, using cash, stock and notes, to pay future claims.

KBR and DII Industries filed for bankruptcy protection in 2003 to deal with claims by about 400,000 people who said they were injured by asbestos exposure. Halliburton, once run by Vice President Dick Cheney, inherited most of the claims five years ago when the conglomerate, during Cheney's tenure as chief executive officer, acquired Dresser Industries Inc. for $7.7 billion. Cheney left the company in 2000.

The president has not expressed support for any specific bill in Congress.

A hearing is scheduled Tuesday for a bill being pushed by Sen. Arlen Specter, R-Pa., the chairman of the Senate Judiciary Committee. Specter said this week that Republicans will try for quick action on a measure that would end asbestos lawsuits in exchange for a trust fund to compensate victims.

Republicans say Democrats wouldn't let previous bills pass because trial lawyers don't want to lose the money they make from asbestos lawsuits. Democrats argue that the GOP bills didn't have enough money for victims and that Republicans are only trying to help their friends in the business and insurance communities by immunizing them from lawsuits.