Ohio Proves Establishing Transparency in Bankruptcy Trust Claims Works

North Carolina’s legislative leaders should take note of Ohio’s successful asbestos trust reform as they consider Senate Bill 470: Personal Injury Bankruptcy Trust Claims. Ohio sought to establish transparency and fairness in bankruptcy trust filings four years ago – the first state in the country to implement such reforms. The legislative action was met with opposition questioning whether or not the disclosure requirements would delay proceedings for plaintiffs. Those questions have since been answered and as the U.S. Chamber Institute for Legal Reform’s report Watching it Work: The Impact of Ohio’s Asbestos Trust Transparency Law on Tort Litigation in the State confirms, “there is no systemic evidence that the trust transparency reforms enacted in Ohio have caused delays in case resolutions.” Analyzing asbestos trust cases before and after Ohio’s law was enacted, the study showed that by 2014, the law “had become routine,” and resulted in “no appreciable delay in the prosecution of cases.”

Ohio’s success establishing transparency in bankruptcy trust claims without causing delays for plaintiffs should encourage North Carolina’s legislators as they seek to do the same. While opponents of Senate Bill 470 may claim the law could cause delays – a notion disproven in Ohio – in actuality the law will expedite the receipt of trust payments by accelerating claim filings, while establishing measures to increase transparency in our costly civil liability and bankruptcy trust system. By necessitating trust claims be filed prior to trial instead of after, Senate Bill 470 promotes honesty in both trust claiming and civil litigation.

As a disclosure bill, Senate Bill 470 will not take away from a plaintiff’s ability to file claims or recover damages but it will keep bad actors from gaming the system. Enacting commonsense reforms that strengthen North Carolina’s legal climate and creates greater certainty is critical to maintaining North Carolina’s overall competitiveness. While our state’s legal climate has risen in the ranks over the last several years, there is still more to do to ensure North Carolina’s competitive legal climate remains conducive to new business investment. We are thankful that Senator Michael Lee has taken steps to initiate such action by introducing Senate Bill 470. North Carolina’s legislators should follow Ohio’s lead and establish transparency and fairness in bankruptcy trust claims.

Gary J. Salamido
Vice President, Government Affairs
North Carolina Chamber

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