Does the FACT Act Have a Burdensome Effect on Claimants?

Empty courtroomThe main purpose of the Furthering Asbestos Claim Transparency (FACT) Act is to reduce the number of fraudulent asbestos-related claims, however, the real result is that the compensation legitimate victims are entitled to is being delayed. Some claimants suffer from mesothelioma and can’t afford these delays as they require immediate treatment.

The Dangers of Asbestos Exposure

Four decades ago, authorities started limiting the use of asbestos due to health risks. According to the CDC, 45,221 people died of mesothelioma – a type of cancer caused mainly by exposure to asbestos – between 1999 and 2015 in the United States. Despite this, US companies are still importing and using this mineral in various industries.

The Asbestos Nation claims that between 12,000 and 15,000 people die each year from diseases related to asbestos. Since the exact causes are not recorded or reported, the number of deaths could be much higher.

A Closer Look at the FACT Act

In the 1970s, people began suing companies that used asbestos and the number of cases grew significantly over the following decades. Approximately $49 billion had been paid out in compensation to around 730,000 people by 2002. Many of the companies being sued decided to file for reorganization under the bankruptcy law and set up trusts to pay out on asbestos claims.

In 2015, the FACT Act was introduced in an attempt to make the compensation being awarded from the trusts more transparent. The main goal of the bill is to reduce the likelihood of the system being abused by claimants filing for compensation from multiple trusts.

One of the stipulations of the FACT Act is that every trust must release a quarterly report detailing every claim, which is sent to the bankruptcy court. The report must include the name of the victim, the situation in which they were exposed to asbestos, and the reason why they were awarded compensation.

The FACT Act also forces these asbestos trusts to give companies at risk of being sued over asbestos exposure any information they require related to a claim.

Why Does the FACT Act Do More Harm than Good?

The bill gives companies the power to repeatedly ask for more information regarding a claim, which will delay the process. Furthermore, the FACT Act will require trusts to put in tens of thousands of hours every year to compile the reports being requested, which will require the trust spending money which could be used for settlements. It will also cause further delays.

Many of the victims submitting a claim are already dying from mesothelioma and other diseases. Thus, some settle for a much smaller amount, even when the company being sued is solvent, as they can’t afford the delays. Even the best personal injury attorney will have to deal with companies falling back on the FACT Act.

The reports the trusts have to file will also include a lot of the claimant’s personal information, including the last four numbers of their social security numbers, work histories, addresses, information on their personal finances and more. Since the reports are for public consumption, many people’s personal information will be available to the world, opening them up to a number of other issues, including the risk of identity theft and fraud.

What About the Fraud the FACT Act Is Attempting to Stifle?

The Government Accountability Office analyzed the situation and was unable to find any proof of fraudulent claims. One of the issues raised by supporters of the FACT Act is that victims are filing claims with multiple trusts. However, this is not illegal nor fraudulent. Some victims were exposed to asbestos as a result of multiple companies. For example, firefighters and other first responders can be exposed to asbestos in multiple settings, so it is only natural for them to seek compensation from all the companies that were responsible.

Furthermore, according to a RAND study, these trusts are already severely underfunded. The median compensation payment is just a quarter of the value, with some victims receiving as little as 1.1 percent.

Asbestos Is Still Legal

Despite the harmful effects of asbestos, it is still legal and used quite extensively in a number of industries. And people have no way of knowing who is using this mineral and in what applications. For examples, a series of tests the EWG Action Fund commissioned in 2015 found that four different brands of crayons and two different brands of crime scene fingerprint kits for children contained asbestos fibers.

The FACT Act seems to be designed to protect the companies rather than the victims by delaying compensation payouts as much as possible. And while many of these companies continue to profit from asbestos, thousands of people are losing their lives.