For decades, manufacturers throughout the United States thought of asbestos as a miracle fiber. It was strong, durable and fire-resistant. Accordingly, they used it in all sorts of materials, from floor tiles to insulation and brake pads to gaskets and hair dryers.
The problem was that researchers eventually learned asbestos exposure could cause cancer. Yet, despite the fact manufacturers now understood asbestos could kill, they continued to use it. They risked the lives of their customers and employees. Eventually, these customers and employees started demanding justice. Their demands led to the creation of asbestos trust funds.
How asbestos trust funds were created
Asbestos trust funds formed as the result of the many lawsuits filed by mesothelioma, lung cancer and asbestosis victims. More and more companies found themselves facing huge, overwhelming liabilities. They had put people at risk and were now responsible for paying back untold millions or billions of dollars. By 2002, these lawsuits led to a tipping point:
- 730,000 people had sued for asbestos-related damages
- Courts had awarded these plaintiffs and their families nearly $49 billion in damages
- Approximately 100 companies found themselves facing bankruptcy
Notably, most of these companies didn’t seek bankruptcy as a way to get out of business. They wanted to use Chapter 11 bankruptcies to reorganize, shed their asbestos liability and move forward. Fortunately for the customers and employees injured by their exposure to asbestos, the courts ruled that the companies needed to form asbestos trust funds as part of their reorganization.
How asbestos trust funds work for asbestos victims
The creation of these asbestos bankruptcy trusts means that victims now have more than one way to pursue justice:
- In many cases, victims may still sue the companies responsible for their asbestos exposure
- In other cases, victims may apply for compensation from one or more asbestos trust funds
Typically, victims may not sue the companies responsible for their illnesses if those companies have already established asbestos trust funds. As much as the courts ordered their creation to help victims, companies were willing to create the funds because they gained some immunity against future lawsuits.
Instead, victims injured by the companies that created the asbestos trust funds can apply for help. However, there are dozens of trust funds, and each uses a different structure and a different claims procedure. They also set forth different guidelines for the proof of exposure. The process isn’t the same as a lawsuit, but it is still a difficult, detailed process. Applicants frequently rely on the help of attorneys experienced with the process.
An imperfect system
Despite the fact asbestos trust funds offer easier access to compensation than lawsuits, they are still an imperfect system. The process may take longer than victims would like. This makes it important to start the application process in a timely fashion. Even claims filed for expedited review can take several months to resolve. Fund managers may also set lower values for compensation than the applicants feel is fair. Even then, the values set by the fund managers may shrink as the funds factor in their liability to other current and future claims. Accordingly, the average value of a mesothelioma claim is $180,000, but the award for such a claim might only amount to $36,000.
All this means that victims seeking compensation from these trust funds want to understand more than the proof and forms they need. They want to understand the real values of their claims as well as the adjustments that might reduce their awards. Finally, they want to understand their options should they refuse the initial offer.