The U.S. Government Accountability Office (GAO) recently released a report that demonstrates the true role of asbestos trusts, suggesting that these trusts do, in fact, have measures to prevent fraud and are transparent.
According to the report, which was requested by House Judiciary Chairman Lamar Smith, asbestos trusts paid out approximately 3.3 million claims valued at approximately $17.5 billion from 1988 through 2010.
The GAO notes that asbestos litigation stems from the “lengthy” occupational exposure to the carcinogenic material experienced by a number of Americans, as such exposure has been linked to the development of asbestosis, lung cancer and the rare cancer malignant mesothelioma.
Due to negligence on the part of manufacturers and other companies that utilized asbestos products, approximately 100 firms have declared bankruptcy at least in part due to asbestos liability, the GAO found.
Transparency of asbestos trusts holds up
One of the major reasons why the GAO was called upon to complete the report on asbestos trusts was the fact that the U.S. Chamber and asbestos manufacturers had accused the trusts of not being transparent.
This, however, is not the case, according to the GAO, which noted 98 percent of the trusts it reviewed required a claims audit program and that defendant corporations have the ability to access information that may not be readily available to the public.
“Most asbestos trusts we reviewed publish for public review annual financial reports and generally include total number of claims received and paid,” the GAO report stated. “Other information in the possession of a trust, such as an individual’s exposure to asbestos, is generally not available to outside parties but may be obtained, for example, in the course of litigation pursuant to a court-ordered subpoena.”
Lack of fraud detected by GAO
In addition to the fact that asbestos trusts were found to be transparent, the GAO noted that none of the trust officials who had conducted the audits indicated that there were any instances of fraud, according to the report.
While asbestos manufacturers have fought to do away with these asbestos trusts claiming they can ultimately enable plaintiffs to receive extra compensation, the GAO also found that most trusts can’t pay the full value of a claim, with a payment percentage being determined.
Gary M. Paul, president of the American Association for Justice, said in a statement that the GAO report suggests asbestos producers must still be held accountable for their role in exposing employees to the carcinogenic substance.
“The GAO has found what we knew all along: this attack on asbestos trusts is just the latest attempt to shield asbestos manufacturers that knowingly killed their workers for decades,” Paul said.