The Business Council supports S.5504/A.5978, which creates transparency between asbestos trust claims and asbestos tort actions by requiring the disclosure of all past, pending, and anticipated asbestos trust claims by a plaintiff. Currently, New York does not require plaintiffs in asbestos actions to disclose whether they have previously recovered from trust funds.
Congress enacted Bankruptcy Code 11 U.S.C. § 524(g) authorizing companies with mass asbestos tort claims to establish and fund a trust to address and pay claims. The trusts distribute funds according to the Trust Distribution Procedures containing a schedule of diseases and criteria for exposure and medical conditions that claimants must meet in order to have their claims paid for from the trust. Trust administrators review and pay claims.
The trust system has not resulted in any reduction of claims. According to the American Bar Association, as major asbestos product manufacturers have departed from the tort system by forming asbestos trusts, payments made by the remaining solvent defendants have actually increased, while claimants continue to seek recovery through the courts.
The current lack of information sharing regarding asbestos trusts and the tort claims is a key reason for the continued rise in claims.
The proposed legislation does not encumber the rights of injured claimants to file in court and through the settlement trust system. Rather, requiring plaintiffs to disclose to the court all past, pending and anticipated trust claims, and authorizing the court to compel a plaintiff to file a claim with the appropriate trust, while creating set-offs for prior recoveries, ensures a fair system. This kind of transparency will result in a reduction of fraudulent claims and will ensure that resources will be available for claimants into the future.
For these reasons, The Business Council strong supports legislative approval of S.5504/A.5978.