Today, the U.S. House Judiciary Committee passed the “Furthering Asbestos Claims Transparency (FACT) Act of 2012,” which would require asbestos bankruptcy trusts, established to pay current and future asbestos personal injury claims, to report claimant filing information on a quarterly basis to the federal bankruptcy courts.
We commend the House Judiciary Committee for bringing much needed transparency to a broken asbestos compensation system that is largely driven by the growing number of asbestos bankruptcy trusts operating in secrecy throughout the country. The opaque nature of the trust system, and its inherent lack of accountability, has created perverse incentives for the trial bar to abuse the system for pecuniary gain. Indeed, over the past several years, more and more instances of troubling specious claiming have come to light where asbestos lawyers have submitted inconsistent claims in the tort system when compared to what is being said to the various bankruptcy trusts.
This bill’s reporting requirements would ensure that trusts have sufficient funds to pay legitimate claims by rooting out fraud in the system. We therefore urge the full House to pass the bipartisan FACT Act swiftly.