The House Judiciary Committee today approved U.S. Representative Blake Farenthold's (TX-27) legislation to strengthen the Asbestos Trust System by promoting transparency to combat the fraud and abuse that currently plague the system. Representative Farenthold and Judiciary Committee Chairman Bob Goodlatte (VA-06) praised the Committee vote.
"When attorneys and their clients bring false or exaggerated claims to trusts, they take assets from deserving victims," said Representative Farenthold. "The FACT Act will discourage this kind of abuse by shining light on the trust system, as sunlight is often the best disinfectant.
"Our bill strikes the right balance between transparency and privacy--and I am proud to have the Committee's support on something that is going to help victims of asbestos exposure get the financial support they need and deserve," concluded Rep. Farenthold.
Chairman Goodlatte said, "The FACT Act is common-sense legislation that is designed to promote transparency, discourage fraud and ensure that funds meant to benefit legitimate future asbestos victims are not used to pay abusive claims. If asbestos trusts are to have assets available to pay the claims of deserving future claimants tomorrow, Congress must take steps to assure that trust assets will be better protected today."
There are roughly 60 asbestos trust funds with nearly $40 billion in assets. Current law allows for opportunistic individuals to file conflicting claims with numerous trusts and within the state court tort system, seeking multiple payouts.
The FACT Act amends Section 524(g) of the Bankruptcy Code to require asbestos trusts to file quarterly reports with the bankruptcy court that detail claimants' names, the amount paid to each claimant and the basis for such payment. This will allow parties to compare claims and prevent fraudulent or duplicate filings, and preserve the trust funds for deserving victims.