May 8, 2013
Previously published on May 6, 2013
John Hare, Chairman of the Post-Trial and Appellate Advocacy Practice Group at Marshall Dennehey Warner Coleman & Goggin, recently testified before the Pennsylvania Legislature in support of a bill he co-drafted that seeks transparency in the process by which claimants seek compensation from asbestos bankruptcy trusts. The bill, designated HB 1150 and titled "The Fairness in Claims and Transparency Act (FaCT)," addresses the widespread problem in asbestos litigation where claimants seek compensation for the same alleged injuries from both bankruptcy trusts and from solvent defendants in the tort system. Claimants in this situation often receive double recoveries because they either fail to disclose in the tort litigation that they recovered from the bankruptcy trusts or wait until the tort litigation is over to file claims with the bankruptcy trusts. As a result, claimants receive full compensation for their alleged injuries in the tort litigation and receive additional recoveries from the bankruptcy trusts. HB 1150 seeks to prevent this "double dipping" by requiring claimants to disclose any existing or potential bankruptcy trust claims prior to trial in the tort litigation, including disclosure of the claim forms filed with the trusts, and by providing for the apportionment of liability to the bankruptcy trusts in the tort litigation and reduction of tort recoveries to account for compensation from the trusts. By requiring transparency between the trust and tort systems, and by preventing double recoveries, HB 1150 seeks to preserve the resources of solvent defendants and the bankruptcy trusts to ensure that compensation will remain available to future deserving claimants. HB 1150 was submitted to the House Judiciary Committee in early April and further legislative action is expected later this year.
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