Asbestos trust funds, also called mesothelioma trust funds, have an estimated $30 billion in reserve for asbestos victims and their families. The amount each person receives depends on several factors, including the extent of illness and the total number of people making claims on the individual trusts.
In many cases, asbestos victims have been exposed from several sources so they can make claims on several trusts. Court-ordered trustees manage the finances and trust distributions and follow strict criteria to determine how much compensation claimants receive.
Since the trusts must safeguard their funds to pay all current and future claims, most trusts pay a percentage of a claim (ranging from 1% to 100%). Victims who are most ill (such as mesothelioma patients) receive the highest amount of compensation.
How is Trust Fund Compensation Determined?
Asbestos trusts were established to provide financial compensation to patients and families who have suffered the most from exposure. Each trust has established disbursement terms based on presumptive medical and exposure criteria. The terms establish if a claim qualifies for compensation.
When determining asbestos trust fund settlements trustees review the claims against at-fault companies. In general, some of the factors that impact compensation levels include the following:
- Cost of medical expenses and care
- Lost wages, including potential earnings
- Debt due to medical condition
- Physical pain and suffering
- Malice and negligence by the at-fault company
- Marital status
- Age of children
- Loss of familial relationships
Types of Claim Reviews
Most asbestos settlement trust fund claims begin with a consultation between the victim and a qualified mesothelioma attorney (See claims process below). After getting the necessary information, mesothelioma attorneys submit documentation to the trust for a claims review. Reviews can happen in one of three ways:
An expedited review allows for quick claims settlement, so asbestos victims and family members can gain fast access to settlement money.
Through the expedited process, claimants must meet the criterion established by the trust, which includes medical evidence and occupational exposure history. The ER is considered less burdensome on claimants because the review is based on easily identifiable medical and exposure criteria. Once the trustees verify the information, claimants are offered a fixed settlement amount.
The disbursement amount depends on the size of the trust. For example, Owens Corning, one of the largest asbestos trusts in operation today, has established the following scheduled values for ER settlement amounts:
|Asbestosis/Pleural Disease/Level III||$19,000|
|Asbestosis/Pleural Disease/Level II||$8,000|
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As with other asbestos settlement trust funds, Owens Corning only pays a percentage of the settlement amount to allow for enough funds for all claimants. The most recent percentage for Owens Corning, established in 2018, is 11.1%. Under the 11.1% percentage rate, Owens Corning pays $23,865 for mesothelioma claims.
If the trustees determine the claimant does not meet the standards for compensation through an ER, the claimant can elect for an individual review.
Individual Review (IR)
When a claim does not meet the trust’s presumptive medical and exposure criteria and the claim is denied, claimants can escalate their case to an individual review. Also, claimants who are seeking more significant settlement amounts (larger than the expedited review provides) may opt for an individual review.
IR claims may garner more or less funds for the claimant, depending on the trustees’ examinations and decision. When reviewing the cases, trustees look at factors that include:
- Claimant’s age, level of disability, employment status, disruption in family life and pain and suffering
- Evidence that the claimant’s injuries were caused by asbestos-containing products directly related to the company in question
- Industry of exposure
- Outcomes of other similarly situated claims
The IR process is known to take longer than an ER, so it may not be best suited for claimants who require funds immediately.
For those who have a grave illness (mesothelioma) and need funds immediately, the extraordinary claim can provide financial relief.
Claimants who meet the presumptive medical and exposure criterion for an expedited claim and the exposure is a result of a single employer (or product) are eligible for an extraordinary claim review. Claimants can accept the settlement offer or move to arbitration.
How to File a Claim Against an Asbestos Trust Fund
Asbestos cancer victims who file claims against bankruptcy trust funds must be able to provide extensive documentation to prove exposure and illness. Most claimants choose to rely on expert asbestos and mesothelioma attorneys to file the complicated claims.
In general, the claims process can be broken down into a four-step system:
- File a claim – During this initial investigative step, claimants and their attorneys research all possible sources of asbestos related to the claimant’s disease. Information collected will include details about the disease level, occupational history (including dates and locations) and military service, among others. Claimants determine if an expedited or individual review best suit their needs.
- Trustees review claims – Trustees review documentation and evidence based on the three review procedures — expedited, individual or extraordinary. They use the provided information to make a factual determination on a claim (see claims review above). All requests are reviewed on a first-in, first-out (FIFO) basis.
- Claims liquidation -After the claim is validated, a monetary amount is assigned. Expedited claims are assigned a predetermined amount, while individual and extraordinary claims can be negotiated. All of the claims are subject to a payment percentage, which changes based on the number of claimants to the single trust.
- Payment -Once a monetary offer is offered, claimants have a set number of days (usually 30) to accept the claim. The financial restitution can be sent in the form of an automatic bank deposit.
Largest Asbestos Trust Funds
Currently, about $30 billion is being held in 60 active asbestos trusts formed after at-fault companies filed Chapter 11 bankruptcy. The trusts allow the companies to continue daily operations while handling asbestos claims. A board of trustees established by the courts manages each trust.
The first trust created, in 1987, was from the Johns-Manville Corporation, the largest provider and producer of asbestos worldwide. When the trust was finalized, it was funded with $2.5 billion. Since then, several other trust funds with billions of dollars have been established.
|U.S. Gypsum Corp. (USG)||Amt. in Trust: $3.9 billion, Created: 2006, Percentage Payment: 25% for expedited and individual reviews|
|Pittsburgh Corning Corp. (PCC)||Amt. in Trust: $3.5 billion, Created: 2016, Percentage Payment: 30.1% for expedited and individual reviews|
|Owens Corning/Fibreboard (OC)||Amt. in Trust: $3.4 billion, Created: 2007, Percentage Payment: Owens Corning (OC) pays 11.1% for expedited and individual reviews. Fibreboard (FB) pays 9% for expedited and individual reviews|
|W.R. Grace and Co.||Amt. in Trust: $2.9 billion, Created: 2001, Percentage Payment: 26% for expedited and individual reviews|
|DII Industries (Includes asbestos liabilities for Halliburton Company, Harbison-Walker Refractories Company, Kellogg Brown & Root, Inc. and Dresser Industries, Inc.)||Amt. in Trust: $2.5 billion, Created: 2005, Percentage Payment: 60% for expedited and individual reviews|
|Babcock and Wilcox Co. (B&W)||Amt. in Trust: $1.8 billion, Created: 2006, Percentage Payment: 11.9% for expedited and individual reviews|
|Combustion Engineering (CE)||Amt. in Trust: $1.43 billion, Created: 2005, Percentage Payment: 25% for expedited and individual reviews|
|Kaiser Aluminum & Chemical Corp.||Amt. in Trust: $1.2 billion, Created: 2006, Percentage Payment: 25% for expedited and individual reviews|
|Eagle-Pitcher Industries||Amt. in Trust: $730 million, Created: 1997, Percentage Payment: 33% for expedited and individual reviews|
|Federal Mogul (includes asbestos liabilities for Turner & Newall (T&N), Gasket Holdings Inc., Flexitallic, Ferodo America Inc. and Vellumoid)||Amt. in Trust: $690 million, Created: 2007, Percentage Payment: Federal Mogul Asbestos Personal Injury Trust T&N Subfund pays 8.5% for expedited and individual reviews. Federal Mogul Asbestos Personal Injury Trust FMP (Federal Mogul Products) Subfund pays 6.9% for expedited and individual reviews|
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Daniel Wasserberg was a New York metropolitan area “Super Lawyer Rising Star” from 2013 to 2018 (attorneys under age 40), and a Super Lawyer in 2019. In 2017, Daniel was named a “Top 100 Civil Litigator” by the National Trial Lawyers organization. This recognition is rarely awarded to attorneys under the age of 40. Daniel is proud to call himself a Trial Lawyer, and is often asked to speak at gatherings of the nation’s leading attorneys, from both sides of the bar.Learn More
- DII Industries PI Asbestos Trust. “Exposure Criteria.” Retrieved from https://www.diiasbestostrust.org/exposure-criteria/
- U.S. Department of Labor. “Asbestos” Retrieved from https://www.osha.gov/Publications/OSHA3507.html
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