Document DMGV1rnnewkJgp3ZzGYyG7zqn

FRICTION MATERIALS STANDARDS INSTITUTE, INC., EAST 210 ROUTE 4, PARAMUS, NJ 07652 BULLETIN NO. 831 July 2, 1985 ASBESTOS CLAIMS FACILITY On May 1, 1985 the Institute advised on the establishment of an "Asbestos Claims Facility" by a group of asbestos producers and insurance companies. More details on this claims facility were described recently in the WALL STREET JOURNAL. A copy of the article from the Journal is enclosed. An item of interest is that the article states that claims facilities will be set up early next year in Boston and San Francisco. Earlier it had been projected that the facilities would be open this year. The May 1, 1985 Bulletin and press release more fully described establishment of the facility. The foregoing is for your information. E. W. Drislane Executive Director Distribution: Delegates and Alternates FMSI-0429 FMSI 02547 WALL STREET JOURNAL, JUNE 21, 1985 Fifty Asbestos Makers, Insurance Firms Reach Agreement on Claims Facilities fer a fair settlement, people will go right By Jonathan Dahl back to the courts." St tiff Hr porter o/Tiik Wail StrkktJouknal The facilities will be funded by the in Fifty asbestos producers and in surance companies to settle their policies surance companies reached a definitive with the producers. The amount of cover agreement In open claims facilities to age that will be available runs into the bil eventually pay billions of dollars to as lions of dollars over the next several years. bestos victims. The insurers also agreed to pay $15 million The agreement, which first was an a year to run the facilities. nounced tentatively by a smaller number The agreement ends a bitter dispute be of companies last year, marks a major tween the producers and the insurers over step toward resolving some 30,000 as the liability of asbestos claims. Asbestos bestos-related lawsuits. In addition, it par related diseases often don't show up for tially settles a multibillion lawsuit be many years after exposure, so many in tween four producers and about 75 in surers couldn't agree which company was surers that recently went to trial in San liable for which producer. Several lawsuits Francisco. have been filed over the matter, and some But the agreement is far from a final were consolidated into the case in San resolution of all personal-injury asbestos Francisco. matters. Several major former asbestos To resolve the issue, the insurers com producers and insurers, including Manville promised essentially by agreeing to divide ] Corp. and Travelers Insurance Co., haven't their payments based on the length of their I joined. In addition, attorneys for victims policies' coverage. i said they may challenge it. Several major insurers and former as i "This doesn't make the problem go bestos producers are included in the agree I away, but it provides a basis for resolving ment. including Aetna Life & Casualty Co., it.' said Scott Gilbert, an attorney in Lloyds of London, Fireman's Fund Inc., Washington. D.C.. who helped negotiate Pittsburgh-Coming Corp. and U.S. Gypsum the agreement. Co. But Manville, once the nation's largest Under the agreement, the companies asbestos-products maker, hasn't joined the will set up claims-handling facilities early next year in Boston and San Francisco. Those facilities will seek to settle lawsuits brought by individuals claiming they con tracted various respiratory diseases from exposure to asbestos products. Asbestos is ; a mineral once widely used for building : and pipe insulation. The claims offices will handle disputes ; similar to the way insurance claims are j handled, attorneys said. Although the of- i fices won't be open until next year, some j asbestos claims could begin to be filed as i early as next fall, attorneys added. agreement because it is still facing legal complications from its bankruptcy-court proceedings. It has been protected from creditor lawsuits under Chapter 11 of the federal Bankrutpcy Code since August 1982. In addition, several major insurers that didn't agree with the compromise for re solving asbestos claims aren't included. Some have said, however, that they will consider joining the agreement later. "We're not opposed to the concept." said George McKeon, counsel for Travelers In surance. "We just don't agree on how they're interpreting the policies." 1 The facilities' goal is to avoid the costly Some attorneys for asbestos victims and time-consuming litigation that has said the agreement might hurt their cli plagued asbestos cases for years. About $1 ents. Currently, asbestos claimants settle billion has been spent on such cases in the cases separately with as many as 20 pro past 10 years, but only a third of that has ducers, often for amounts higher than they gone to victims while the rest has gone to would receive in joint settlements. But the attorneys, according to some recent stud agreement calls for the companies only to ies. But the facilities won't block anyone settle court cases jointly. from proceeding with or initiating litiga "This could be challenged on antitrust tion if they are unhappy with the facilities' grounds," said Fred Baron, a Dallas attor offer. ney for asbestos victims. But he also called "That's what provides a check on the the agreement a "step in the right direc facility," said Mr. Gilbert. "If it doesn't of- tion." ___________ FMSI 02548 T