(Recasts with meeting on Monday, other details)
By Susan Cornwell
WASHINGTON, May 16 (Reuters) - The draft of bipartisan legislation to curb asbestos lawsuits was batted around Capitol Hill on Friday as the Republican driving the effort replied to criticisms of Democrats and agreed to meet them next week.
Sen. Orrin Hatch, who wants to set up a $108 billion national trust fund to pay asbestos claims, suggested using the medical standards of an existing asbestos trust fund, the Manville Trust, to determine compensation for victims.
The Utah Republican made the suggestion in a letter Thursday to several Democrats after they criticized his original idea, which was to have a presidential commission set injury standards for a national fund to pay asbestos claims.
Hatch also said that defendant asbestos companies had agreed on a formula for their contributions to the fund --eliminating another task that he had suggested should be given to a commission. A copy of Hatch's letter was obtained by Reuters on Friday.
But Hatch, chairman of the Senate Judiciary Committee, remained opposed to a federal backstop to ensure the solvency of the trust fund that would compensate asbestos victims, cap company liability and relieve the courts of asbestos suits. He said he thought private insurance for the fund should be explored.
A senior Republican aide said Hatch intended to introduce the bill as early as Monday. He said Hatch also planned to meet that day with Democratic senators interested in the bill, including Patrick Leahy of Vermont, Chris Dodd of Connecticut, Ben Nelson of Nebraska, and Tom Carper of Delaware.
Earlier this week those four wrote a letter to Hatch questioning the wisdom of leaving major decisions to presidentially appointed commissions and wondering if the funds were enough to pay thousands of asbestos injury claims.
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.
The $108 billion fund would pay claims over 25 years, sources familiar with Hatch's plan told Reuters on Friday.
Of the total amount, $45 billion would come from insurance companies, and $45 billion would come from defendant companies with over one million dollars in asbestos liabilities, the sources said, speaking on condition of anonymity.
Another $10 billion would come from companies with less than $1 million in asbestos liabilities. Four billion would come from existing asbestos trusts such as the Manville Trust.
The last four billion would come from companies that have higher stock prices as a result of the adoption of the legislation, sources said.
The Manville Trust was set up in the 1980s to pay claims after asbestos maker Johns-Manville Corp filed for bankruptcy.
But recently it has only been able to afford to pay five percent of claims it determines to be valid, based on medical standards. Hatch is proposing that the new national fund pay the full amount of claims judged to be valid, which would be hundreds of thousands of dollars to victims with the deadliest asbestos-caused cancer, sources said.
Defendant companies, insurers and unions have been negotiating with lawmakers to craft a legislative solution to the soaring number of asbestos lawsuits that have driven dozens of companies into bankruptcy, including building materials firm Owens Corning and auto parts supplier Federal-Mogul Corp. .