The U.S. House of Representatives is voting today on the bi-partisan Furthering Asbestos Claim Transparency (FACT) Act, which would require asbestos trust claimants to disclose certain information about relief they have sought before pursuing litigation.

As the Wall Street Journal explains, this legislation is much needed to prevent fraud:

Companies sued into bankruptcy often create trusts to fund payouts for current and future asbestos victims. Asbestos trusts manage some $36 billion, which is an invitation to fraud. The plaintiffs bar files claims with many trusts on behalf of the same client—arguing a different cause of asbestos disease with each claim. They can pull this off because trusts don’t share claims data with each other or with the courts, and the plaintiffs bar has pressured the trusts to keep claims confidential.

But evidence of fraud abounds. An Ohio judge in 2006 discovered the law firm of Brayton Purcell had filed claims to trusts arguing that asbestos caused its client’s mesothelioma, only to sue a cigarette company for causing the same cancer. Brayton Purcell was barred from practicing in Ohio.

Garlock Sealing Technologies, a gasket maker in bankruptcy, says it has evidence that plaintiffs have claims with multiple trusts that blame non-Garlock products for their diseases. Yet at the request of plaintiffs’ lawyers, a federal judge has sealed the evidence.

The Journal reported in March that the Johns Manville trust had paid $26,250 to a claimant invented by a law-firm employee. It found that more than 2,000 applicants to the Manville trust claimed to have been exposed to asbestos working in industrial jobs before they were 12 years old. A House Judiciary hearing last year featured witnesses to fraud in at least a half-dozen states.

Similar to the federal FACT Act, Wisconsin legislation (AB 19/SB 13) will preserve money for future claimants by requiring plaintiffs’ attorneys to disclose whether they have received claims from trust funds before they sue a solvent Wisconsin business. This will help prevent trial attorneys from double-dipping: receiving compensation once from a trust fund and second time from a solvent Wisconsin business for the same claim.

AB 19 has passed the Assembly and was recommended for passage by the Senate Judiciary Committee. WCJC is urging the Wisconsin Senate to schedule a vote to enact this important piece of legislation to protect current and future asbestos victims.