(Adds details, comment from Democrats, labor)
By Susan Cornwell
WASHINGTON, April 29 (Reuters) - U.S. labor and industry officials are nearing agreement on a proposed trust fund of between $90 billion and $120 billion to pay asbestos injury claims, a senator overseeing the effort said on Tuesday.
"We're almost there," said Utah Republican Sen. Orrin Hatch, who in March asked the warring parties to thousands of asbestos lawsuits to help him draft legislation to resolve the crisis that has clogged U.S. courts and driven dozens of companies into bankruptcy.
Defendant companies, insurers, and unions are close to agreeing on a legislative proposal to take the cases out of the courts, set up a special asbestos tribunal to hear them and allocate payments from a national trust fund, Hatch said.
The size of the trust fund is one of the things yet to be decided, Hatch, chairman of the Senate Judiciary Committee, told reporters. "The business community is somewhere near 90 billion, the labor community is somewhere near 120.
"Frankly it can't be as high as 120 and I don't think it can be as low as 90," Hatch said. "So I'm going to work that out and hopefully we can get all of their support."
Asbestos was widely used for fireproofing and insulation until the 1970s, when scientists concluded that inhaled fibers could be linked to cancer and other diseases. But because disease can take decades to materialize, many of those suing for exposure are not currently ill.
Potential asbestos liability costs are enormous. Tillinghast-Towers Perrin, an actuarial consulting firm, says cumulative liability could reach $200 billion.
Hatch said the trust fund idea was a bipartisan effort, with Democratic and and Republican lawmakers trying to reach a deal that could be put into legislation. Agreement was close in the talks, which are being held behind closed doors.
"We still want to give it just a little bit more time to see if we can get there. I'm not going to give an inordinate amount of time," Hatch added.
He suggested that without complete agreement he may still introduce a bill. "I think we've got all the elements to put together a pretty good package. The question is, do we get all parties together to agree, or do we have to just go ahead with what we think is the best way."
A spokesman for Sen. Patrick Leahy of Vermont, the ranking Democrat on Hatch's committee, confirmed he was still involved in the effort to reach an asbestos solution. Leahy held a hearing on asbestos litigation last September, while Democrats still had the majority in the Senate.
Among companies that have filed for bankruptcy protection in recent years because of asbestos liability claims are building materials company Owens Corning and auto parts supplier Federal-Mogul Corp.
TALKS BEHIND CLOSED DOORS
Hatch said he envisioned a five-judge tribunal, to be appointed by the president, to hear asbestos claims. There would still be a limited right to appeal to the courts.
There would be different levels of payments depending on the category of illness, Hatch said. He said it was important that the sickest cases get priority, while those who may become sick later retain their right to recover damages then.
Hatch did not describe how the trust would be funded, other than to say he did not foresee a federal government contribution. But business and insurance representatives involved in the talks have proposed dividing evenly the costs of a $90 billion fund.
Damon Silvers, the AFL-CIO's associate general counsel, confirmed the union made a proposal last week on how it thought a trust fund could work, including medical criteria and a schedule of payments to victims.
"It's not an offer in terms of a lump sum," he said of the union's proposal. "But you can cost it out, depending on what you think the future holds, to $120 or $130 billion."
Silvers also said he thought the federal government should step in if the fund runs out of money. "Otherwise it's the victims that bear the risk if something goes wrong here."
Over 200 companies and associations, including some in bankruptcy such as Owens Corning, are represented in the asbestos talks by a group called the Asbestos Alliance. It also includes insurers and lawyers for desperately ill victims.
Several Fortune 500 companies not historically associated with asbestos manufacture but who have been pulled into the litigation, are being represented in the talks by a different organization, known as the Asbestos Study Group.
This group includes General Electric Co. and oil services and construction company Halliburton Co. The latter also crafted its own settlement plan with plaintiffs.