Asbestos trust funds needs greater transparency to prevent fraud: Witnesses
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WASHINGTON—The congressionally created system of asbestos trust funds needs greater transparency to prevent potential fraud, a series of witnesses told a House panel Thursday.
The comments came during a hearing on the Furthering Asbestos Claim Transparency Act of 2012—H.R. 4369—before the House Judiciary Committee's Subcommittee on Courts, Commercial and Administrative Law. The bill, which was introduced in April, would require federal asbestos bankruptcy trusts to make quarterly reports about claims and other activities to bankruptcy courts.
Supporters of the bill claim it is necessary to prevent claimants from receiving restitution from multiple trust funds for the same injury.
“This is not a solution in search of a problem,” said Leigh Ann Schell, founding partner in the New Orleans law firm Kuchler Polk Schell Weiner & Richeson L.L.C. She said the current system is “broken,” and that the measure represents “good, commonsense, bipartisan legislation.”
S. Todd Brown, an associate professor at SUNY Buffalo Law School in Buffalo, N.Y., said that nothing in the bill requires more information than is required in bankruptcies every day.
A third witness who supports the measure, Marc Scarcella, manager at Bates White Economic Consulting in Washington, said transparency in the operation of the asbestos trusts is “critical” and that the measure would provide a “cost-effective, efficient” way to deal with claims.
But the sole witness speaking against the measure, Charles Siegel, a partner in the Dallas law firm Waters Kraus & Paul L.L.P., said it was “designed to slow down the payment of claims” to people suffering from mesothelioma, and that if the bill becomes law, it would impose “onerous” administrative burdens on the trusts.
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