Those who have developed asbestos-related illnesses, including mesothelioma, are entitled to make a personal injury or wrongful death claim against their employer, or against the asbestos manufacturer. Because of the large number of such claims, many manufacturers have set up trust funds, which are trustee-managed. These trustees determine the level of compensation that someone is entitled to.

However, it is also quite common for asbestos manufacturers to have gone bankrupt. In that case, they should be protected from any type of lawsuit. Meanwhile, due to the complex nature of asbestos cases, special provisions have been made. The U.S. Bankruptcy Code has made provisions so that asbestos bankruptcy trusts can be created. This means that any company that is declared bankrupt under Code Section 524(g) must create funds that will enable compensation to be paid to current and future claimants.

The Creation of Trusts

Asbestos defendants will file under Section 524(g) with the hopes of reorganizing rather than going out of business. This is allowed, but only if they put money in a trust to cover asbestos claims. The amount that has to be placed in this trust must be court-approved and only once it has been funded will the court grant protection. This can take several years to complete.

If a company aims to reorganize in this manner, they first have to provide a bankruptcy court with detailed plans, including how much they intend to fund the trust with. Estimation proceedings will then be held. These proceedings will include claimant representatives, creditors, and more.

Each of these participants will provide an estimate of the funds that may be required for future and current claims. They must support their estimates by advice offered by legal experts, social scientists, economics, and other specialists. The judge takes all this information and testimony and will then determine the level of funds that have to be entered into the trust.

Reorganization plans may be rejected by the court. In fact, it is quite common for this to happen. At that point, the proceedings will start afresh. For this reason, the entire process can take several years.

Filing a Claim to a Trust

Filing a claim to a trust is very similar to starting any other form of legal action. This means that claimants must demonstrate that they have suffered an injury related to asbestos. Usually, there are certain levels and types of diseases that can be accepted, for which specific compensation amounts have already been set in the trust. Usually, certain medical criteria also have to be met.

Claimants will usually have to provide a number of key pieces of evidence to support their claim, including medical history, exposure, work place, and more. Usually, they will have to demonstrate:

• That they have been diagnosed, for which they must show medical information
• That they have a statement from their physician, which confirms the diagnosis
• Where they were exposed to asbestos, supported by written documentation, and that this exposure was related to the defendant
• That asbestos is involved in the disease of the claimant

Decisions on Trust Claims

If an asbestos trust is established, then it is accepted that the company is liable for asbestos exposure. The trust is not operated by the company. In fact, they have no involvement in the case at all. This is done by trustees, who work for the benefit of claimants. When the trust is established, specific procedures and criteria will have been set, and these qualifications, guidelines, and rules are generally openly published.

Is It Possible to File a Lawsuit as well as a Trust Claim?

It is possible to file both a trust claim and a lawsuit. However, any compensation received in either one of those two cases will affect the amount of compensation received through the other. The laws on how this works vary from one state to the next and can be very complex. This is because there are three types of claims that can be made (trust claims, veteran benefits claims, and lawsuit claims), each requiring different paperwork and procedures.

Information Sharing and Setoffs

Different courts and states have different rules about whether or not they share information from trust claims with lawsuit claims. Sometimes, a plaintiff must disclose all information about the trust claims they have made. There are also some courts, including Montgomery County, PA, and New York City, where trust claims must be filed before a lawsuit claim can be filed.

There are also a few states, including West Virginia, Texas, New York, and Illinois, where setoffs are allowed for trust payments. This means that if a claimant has received a trust payment and files a lawsuit, the amount of compensation they received from the trust can be deducted from the compensation they receive at trial.

As you can see, it is quite complex to decide what has to be filed and when. Unfortunately, there is no clearcut answer on what certain laws are, as this all depends on where a claim is filed, which, in turn, depends on a huge variety of factors. Additionally, the state’s statutes of limitations must also be upheld. That said, it is important that victims are not deterred from making a claim, as these trusts and laws are in place to make sure they receive the compensation they are entitled to.

Compensation Received Through Trusts

There is no set minimum or maximum that somebody can receive after filing a trust claim. Usually, a number of factors will determine this, including the rules and regulations set by the trusts themselves. Usually, they will have various asbestos injuries, and various levels of injuries, to which they assign specific amounts.

The majority of trusts, however, do not have sufficient funds available to cover both current and future claims. As a result, they are likely to offer a claimant a percentage. Again, different trusts offer different percentages, ranging from 1.1% to 100% for the 26 largest trusts in the country. The median offered, however, is 25% of a claim. They limit these amounts to make sure that future claimants will also be able to receive compensation.

The FACT Act

The FACT Act, which is the Furthering Asbestos Claim Transparency Act of 2015, has been put in place to ensure trust funds provide transparency on how much they pay to each claimant. According to proponents, this will stop claimants from ‘double dipping’, thereby ensuring more people will be able to receive compensation. However, others are suggesting that there have been no cases of double dipping, and that there are too few fraud cases to suggest this type of system is needed. This is also because the FACT Act will require highly sensitive and personal information to be made public. The FACT Act is not yet law, but GovTrack estimates an 11% chance that it will become one.

Will Future Claims Be Paid?

Asbestos related illnesses have a very long latency period. As a result, it is expected that many more diagnoses will still happen before they will start to drop. In 2011, the various asbestos trust funds had $36.8 billion in assets, divided over the 60 different trusts that exist. Unfortunately, it is unlikely that this is sufficient. Between 1988 and 2015, some three million claims have been filed, and $17.5 billion has been paid to these.

While procedures have been put in place to ensure the money lasts, they are expected to be insufficient. It is for this reason that percentages of claims are now usually offered. It is vital that someone who is considering making a claim seeks strong legal advice in order to determine what their best course of action is, and how they can get the most compensation for their injuries.