WSJ Is Convinced Fraudulent Asbestos Claims “Abound,” Despite All Evidence To Contrary

The Wall Street Journal called on Congress to support the Furthering Asbestos Claim Transparency Act (the FACT Act), baselessly speculating that this GOP bill will curb fraudulent asbestos claims, even though there is no evidence of widespread fraud.

WSJ supports the FACT Act, which has also been championed by the pro-business juggernaut U.S. Chamber of Commerce and has received no bipartisan support. This is not the first time the WSJ has come out in favor of corporate efforts to deny justice to victims of asbestos exposure.

From the November 12 editorial:

Nearly 20 years ago Congress established bankruptcy trusts to help asbestos victims. Better late than never, it is now trying to stop the plaintiffs bar from bilking the trusts with fraudulent claims.

As early as Wednesday the House will vote on the much-needed Furthering Asbestos Claim Transparency (Fact) Act sponsored by Texas Republican Blake Farenthold and Utah Democrat Jim Matheson. The bill would require new reporting rules to expose the fraud that is looting the nation's 60 some asbestos trusts.

Companies sued into bankruptcy often create trusts to fund payouts for current and future asbestos victims. Asbestos trusts manage some $36 billion, which is an invitation to fraud. The plaintiffs bar files claims with many trusts on behalf of the same client--arguing a different cause of asbestos disease with each claim. They can pull this off because trusts don't share claims data with each other or with the courts, and the plaintiffs bar has pressured the trusts to keep claims confidential.

But evidence of fraud abounds.


The legal sharks claim the Fact Act will discourage legitimate claims. But the legislation prohibits the release of confidential medical details, Social Security numbers, or other sensitive information protected in the normal course of bankruptcy.

The WSJ spends the rest of its editorial fear-mongering about the potential for fraudulent claims being filed with the asbestos trusts. It cites only a few instances of fraud, and claims that one corporation at the center of asbestos litigation “has evidence” of more -- but it is unable to provide any specifics because the “evidence” has been sealed by a federal judge. 

What the WSJ doesn't mention is that the FACT Act “solves” a non-existent problem. There is little to no evidence of rampant fraud, and the error rate in payments from the asbestos trusts is reportedly only .35 percent. According to the Center for Justice & Democracy, concerns over fraudulent claims been severely overblown, but the FACT Act has raised very legitimate questions about the privacy of claimants -- questions the WSJ dismisses:

The FACT Act has two primary provisions: 1) it requires asbestos trusts to disclose on a public web site private, confidential information about every asbestos claimant and their families, including their names, addresses, where they work, how much they make, some medical information, how much they received in compensation and the last four digits of their social security numbers; and 2) it allows any defendant in any asbestos lawsuit the right to demand any information about any asbestos victim from any asbestos trust at any time for any reason.  The information need not be relevant to, or admissible in, any lawsuit, allowing defendants to skirt normal discovery rules.  

In a strongly-worded June 19, 2013, editorial opposing the bill, the New York Times editorial board, called the bill “misguided,” saying the bill was “rammed through the House Judiciary Committee” supposedly “to root out fraud and abuse” despite the lack of any “persuasive evidence” of this.  What the bill would do, said the Times, is “make it harder for plaintiffs injured by asbestos to get fair compensation.”


[B]y creating a  national registry containing the names of asbestos victims and their families, including financial and even some medical information, asbestos victims will become easy targets for identity thieves, financial predators, and discriminatory insurance practices. This is a terrible and completely unnecessary imposition to place on people who will probably die because the asbestos industry covered up the dangers of asbestos for over 50 years.   At the same time, as noted by the Times, the legislation does not ask the companies to do one thing to help the victims, or to disclose any information that could help a claimant with his or her case.  The asbestos industry is not interested in transparency.  This legislation is nothing but another attempt by the industry to avoid responsibility for the grave harms they have caused. 

WSJ doesn't seem to mind that the FACT Act puts unique burdens on claimants that it does not place on the asbestos companies that injured them in the first place. Victims of asbestos exposure, it should be noted, are disproportionately military veterans who have developed such diseases as mesothelioma and lung cancer after being exposed to asbestos while serving. The WSJ is apparently more concerned about protecting corporate wrongdoers, many of whom continue to make products that contain asbestos  despite knowing the harm they can cause.

Moreover, the WSJ's assertion that claimants' sensitive information will be protected is a half-truth at best. In actuality, the FACT Act will require that the last four digits of claimants' social security numbers and some financial information be disclosed on a public website. Coupled with the fact that asbestos companies can demand other private claimant information at will, without divulging vulnerable information of their own, such disclosure could have a chilling impact on perfectly valid claims to the asbestos trusts.

The FACT Act isn't really about ending fraud, and the WSJ knows it. It's about delaying and denying justice to those who have been harmed by huge corporations.

Photo by Flickr user Adam Arroyo