GAO Deals Major Blow to Asbestos Manufacturers

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For Immediate Release: October 19, 2011

Contact: Katie Gommel
American Association for Justice
202-965-3500 x8369
AAJ Press Room

GAO Deals Major Blow to Asbestos Manufacturers

Report counters efforts from U.S. Chamber and its corporate allies to deny recourse to workers and consumers dying from asbestos exposure

Washington, DC Today, the U.S. Government Accountability Office (GAO) released a report – requested by House Judiciary Chairman Lamar Smith – detailing the role and administration of asbestos trusts.  The report refutes claims made by the U.S. Chamber and asbestos manufacturers, finding that the trusts are transparent and have measures in place to prevent fraud.

The following is a statement from American Association for Justice President Gary M. Paul:

“Tens of thousands of American workers and their families have died from asbestos exposure, a product that is still legal in the U.S.  Asbestos manufacturers should be ashamed of their efforts to prevent these people from obtaining recourse through the trust system. 

“This GAO report shows that the U.S. Chamber and its asbestos allies have severely misplaced priorities.  Their insistence on a GAO study of this issue has backfired, as it found that these trusts are transparent and protect the interests of Americans suffering from asbestos-related diseases.

“The GAO has found what we knew all along: this attack on asbestos trusts is just the latest attempt to shield asbestos manufacturers that knowingly killed their workers for decades.”

The GAO report found the following:

  • As early as 1900, asbestos was recognized as a cause of occupational disease.  By 1960, the connection between asbestos and mesothelioma was established.

  • Most trusts cannot pay the full value of a claim. As a result, trusts determine a payment percentage, a fraction of the full value that can be paid to present claimants in order to maintain sufficient assets for present and future claims.

  • 98 percent of the trusts reviewed by the GAO required a claims audit program.  Of the trust officials interviewed that conducted audits, none indicated that these audits had identified cases of fraud.

  • Each of the 47 trust annual financial reports for 2009 and 2010 that GAO obtained and reviewed included the total amount of payments made by the trusts and most included the total number of claims received and paid.

  • Asbestos defendants can readily obtain additional information related to trusts or claimants through direct requests to the trust or by way of court-ordered subpoenas.

  • Similar to the Federal Rules of Civil Procedure, state civil procedure rules generally protect the confidentiality of settlement negotiations.  This underscores that the federal government (in particular U.S. Congress) has no reason to meddle in this matter of state law and civil procedure.

The plaintiff attorneys interviewed in the RAND study stated that all of the potentially relevant information in the trusts’ possession is available to the defense through pretrial discovery and emphasized that the trusts are analogous to any other settling party and related negotiations and payments are privileged.

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