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Asbestos litigation prospects for legislative resolution
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Asbestos litigation prospects for legislative resolutionCRS Report for CongressOrder Code RL32286Asbestos Litigation: Prospects for Legislative Resolution Updated February 8, 2005 Edward B. Rappaport Analyst in Industry Economics and Finance Domestic Social Policy Division Congressional Research Service •:• The Library of Congress CRS-13 to several provisions intended to bolster initial funding: collection within six months of $4 billion or more from liquidation of existing bankruptcy trusts, commencement of preliminary collections within six months (which may be before any cases are decided and payments made), and expedited judicial review, during which assessments would not be stayed. The fund would also have borrowing authority. (Section 221(b)) Three provisions of the bill specifically deal with the possibility of a fiscal "crunch." First, there is a lockbox-type mechanism (Section 221(c)), whereby the administrator would establish separate accounts for each of the most serious diagnoses (Levels IV, V, IX and X) and reserve needed funds to them first. Implicitly, claimants in other levels would not be paid if sufficient funds are not available for the four protected levels. Second, as an "early warning" system, the Administrator is to include with each annual report a five year financial projection. If any shortfall is foreseen, he is to make recommendations for correction. Finally, if the Fund ever (after the first seven years) actually reaches a point of negative net worth, then the whole program would terminate 180 days after such determination is made. In that case, asbestos claims would revert to the tort liability system. However, they could be pursued only in federal court, not the state courts. |