(Recasts throughout with Democrats' concerns)
By Susan Cornwell
WASHINGTON, May 15 (Reuters) - Democrats involved in efforts to write bipartisan asbestos legislation have questioned a Republican proposal to leave major decisions to presidentially appointed commissions, a letter obtained by Reuters said on Thursday.
The letter from four Democratic senators to Utah Republican Sen. Orrin Hatch revealed large gaps that must still be bridged if the parties are to co-sponsor a bill setting up a national trust fund to pay thousands of asbestos injury claims.
Hatch, who chairs the Senate Judiciary Committee, wants a $108 billion trust fund to compensate asbestos victims, cap liability for companies and relieve the burden on the courts.
The Democrats' letter, dated May 14, is critical of plans to have presidential commissions decide matters such as the medical criteria used to determine injury; how much victims would be paid; and details of how the fund would be funded.
"This lack of certainty may pose a threat to any compensation program," said the letter from Vermont Sen. Patrick Leahy, the ranking Democrat on the Judiciary Committee, as well as Sen. Christopher Dodd of Connecticut; Sen. Thomas Carper of Delaware; and Sen. Benjamin Nelson of Nebraska.
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.
Defendant companies, insurers and unions have been negotiating with Hatch, Leahy and other lawmakers to try to craft a legislative solution to the soaring number of asbestos lawsuits that have driven dozens of companies into bankruptcy.
TRUST SOLVENCY ISSUE
Hatch's $108 billion figure is around half of the amount some studies say companies may ultimately face if asbestos litigation continued in the courts.
"We believe that the legislation must anticipate the possibility that the trust fund may become insolvent and must provide fair compensation for future claimants," the Democrats' letter said.
Nelson's spokesman David DiMartino said the senator signed the letter because "it raises some legitimate questions that need to be discussed before any plan moves forward".
Leahy's aide David Carle said "productive negotiations" with Hatch were underway and would continue on Friday.
"In the ongoing effort to produce a consensus plan, a bill introduction at this stage would be premature, and it also probably would be counterproductive," Carle added.
Hatch told Reuters on Thursday morning that he still hoped to introduce a bill by Monday. "As usual, it's a very difficult task. There's plenty of people trying to kill it," he said.
"Senator Hatch was not encouraged by that letter" from the Democrats, a senior Republican aide said later in the day.
The letter warned that delegating medical standards and compensation values to a presidential commission would not guarantee that the standards or payments would be fair.
"We believe that medical standards should be -- to the maximum extent possible -- clear, unambiguous, and inalterable by administrative action," it said.
Sources close to the talks say labor representatives favor medical criteria that are more liberal than those used by existing trusts handling claims against bankrupt companies.
Some $3.5 billion from existing trusts would be folded into the proposed national trust fund, said David Austern, general counsel to the Manville Trust, set up to pay claims after asbestos maker Johns-Manville Corp filed for bankruptcy.
He said trusts in the works for companies now in bankruptcy proceedings could bring in another $16 billion to $20 billion.
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.