Asbestos Reform Group Launches National PR Campaign

June 16, 2005

The Coalition for Asbestos Reform (C.A.R.), a group of small and medium sized businesses and major insurance companies, has engaged a team of veteran campaign, advertising and public relations professionals to launch a major national campaign to educate U.S. businesses and policymakers about the reported serious flaws in the asbestos liability legislation reported by the Senate Judiciary
Committee last month.

As a part of the effort, C.A.R. has hired Fleishman-Hillard and its affiliate, Mercury Public Affairs, an advertising and research firm with experience in more than 20 Senate campaigns. The campaign will reportedly explain the effect of the Specter-Leahy bill (S. 852) on hundreds of businesses that face potential asbestos liability, most of whom are unaware of the devastating impact of $140 billion in new
taxes S. 852 authorizes to finance the trust fund mandated by the bill.

The C.A.R. campaign is launched at a time when S. 852 has reportedly hit rough water after clearing the Senate Judiciary Committee in late May.

Several Republican Senators who supported the bill in committee have warned they will oppose it on the floor unless substantial changes are made. In addition, Governor Rick Perry of Texas (R) strongly criticized the bill in a letter to President Bush, reportedly describing it as “deeply flawed” and saying S. 852 would “not only be harmful to Texas, it would counter the civil justice reform philosophy we have pursued in Texas in recent years.”

C.A.R.’s Executive Director, Tom O’Brien, urged Senators to recognize that the bill is not in the best interests of either the business community or victims of asbestos poisoning. “We continue, however, to work with Senators Specter and Leahy and other members of the committee to address the fundamental flaws of this legislation,” O’Brien said.

“As it stands today, S. 852 would be harmful to hundreds of companies with tens of thousands of employees – and catastrophic for many of them,” O’Brien continued. “Most of the affected companies do not realize S. 852 enacts a new tax that shifts billions of dollars in liability away from the companies that created the asbestos crisis and onto companies that prudently managed their
risk and purchased insurance to protect their stockholders and employees. Then it cancels the insurance coverage of those companies.”

C.A.R. shares the concerns of several Republican and Democratic Senators on the Judiciary Committee who expressed skepticism about the financial viability of the compensation scheme envisioned by S. 852 and its $140 billion trust fund.

“Widespread doubt about the long-term solvency of the trust fund, and even its short-term solvency, undermine claims that S. 852 will reduce the uncertainty faced by businesses and asbestos victims alike under the current tort system,” O’Brien said. “In fact, S. 852 will create greater uncertainty for everyone except the few big companies who would be allowed to escape the billions of dollars in costs for which they are responsible.

C.A.R. also questions whether the time has passed for a trust fund
solution to the asbestos litigation crisis. “In the past three or four years, the states have stepped forward with medical criteria approaches that have won broad support and other reforms that have reduced the number of frivolous lawsuits,” O’Brien said. “We believe the Congress should look to those models for a federal approach to asbestos reform-not the trust fund model currently contained in S. 852.”

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