Tens of thousands of workers made sick by asbestos will receive sharply reduced compensation payments from the Manville trust under a plan unveiled Monday to resolve the nation's biggest product liability case. The long-awaited restructuring is designed to insure payments to victims of lung cancer and other respiratory ailments, clear a court backlog and create a model for companies facing huge liabilities for asbestos products. The plan includes up to $520 million in new contributions to the trust by Manville Corp., which was driven into bankruptcy court in 1982 by mounting asbestos lawsuits. The trust was formed in the company's 1988 reorganization and faces more than 130,000 claims. ``These steps ... will more effectively, efficiently and Equitably compensate those injured by asbestos exposure,'' Manville chairman and chief executive Tom Stephens said in a statement. The plan was expected to be approved by U.S. District Judge Jack B. Weinstein, who is leading efforts to resolve asbestos litigation. The judge Monday began a process to declare a class action to settle trust claims. A restructured trust would pay asbestos victims according to the severity of illness, rather than when a claim is filed. The plan slashes plaintiffs lawyers' fees to a maximum 25 percent of settlements. It also includes dismissing tens of thousands of lawsuits against the trust pending in state and federal courts nationwide. Asbestos health claims form the biggest product liability issue in U.S. history. Manville trust payments have averaged about $43,000, but are forecast to fall more than half for serious diseases and even more for less severe ailments. Claimants are to receive a maximum 45 percent of settlements until all claims are partially met. ``It is a terrible compromise,'' said Heather Maurer, executive director of the Asbestos Victims of America, an advocacy group representing 18,000 people. ``I$3,000 or $4,000 is in any way just compensation for their diseases and deaths.'' But architects of the plan said it was fair way to compensate victims given the limited funds available. The restructuring was ordered by Weinstein after the trust ran out of cash to pay new claims and said some would be deferred until long into the 21st century. ``Everybody is getting an (equal) share of the fair value of their claim,'' said GEne Locks, a Philadelphia plaintiffs lawyer. ``Some people are going to get it a little faster than others.'' Asbestos is a white mineral with natural insulation and heat resistance used widely for decades in shipbuilding, construction and other industries. A high incidence of lung cancer and other respiratory ailments attributed to asbestos began appearing in the 1970s. Under the Manville plan, payments would be made annually to claimants based on a percentage of the trust's available resources. Claims are split into two groups: cancer and other serious ailments, and lesser diseases. Payments would be made only to claims in the first group during the plan's first two years. An estimated 23,000 such claims are expected to get some money. The group includes relatives of workers who died before being compensated. The more than 100,000 claims in the second group would begin receiving payment in the plan's third year. Payments are to be made first to those with hardships, then according to disease severity, then to claimants over 70 years old and finally to those who filed first. Despite the progress, payments will not resume until Weinstein holds hearings and reviews the plan, or until expected court appeals by plaintiffs lawyers and other defendant companies are Heard. Lawyers estimate that payments might not resume for a year or more. The trust, formed in 1988, has paid out more than $1.1 billion to settle nearly 26,000 claims. A total of 163,000 claims have been filed and more arrive daily. The trust has $434 million in settled but unpaid claims, which will be met in full under the plan. Trust officials have blamed the cash crunch on more claims and bigger settlements than anticipated and faster case resolution. Critics have said the trust was badly managed, doling out too-large payments for minor ailments. The reduction in plaintiffs lawyers' fees from about one-third of settlements followed sharp criticism by Weinstein. ``The 25 percent limitation will over time provide the victims hundreds of millions of dollars that otherwise would have gone to their attorneys,'' Leon Silverman, the court-appointed adviser for the restructuring, said in his report to Weinstein. Dismissing lawsuits against the trust - primarily over the size of or delay in settlements - also should lead to savings. The trust expects more than $50 million in legal defense expenses this year. The plan establishes maximum settlements for specific diseases. They range from $350,000 for mesolthelioma, a fatal respiratory ailment, to $30,000 for pleural disease. Expected median settlements are about 40 percent of the maximum. Payments to all Manville claimants except those with urgent health or financial needs were suspended in July. The Washingon, D.C.-based trust originally was funded with about $3 billion in cash and Manville securities. Its main asset is 80 percent stock ownership of Manville, a Denver manufacturing and natural resources company.
