Proposed Legislation to Increase Transparency in Bankruptcy Trust Claims
A state’s legal climate is among the top factors considered by businesses when deciding where to invest in new or expanded operations. As such, North Carolina’s legal environment significantly impacts the state’s competitiveness as a whole – especially as Tar Heel state businesses face growing competition from both domestic and international businesses with lower litigation costs.
Today, Senator Michael Lee introduced Senate Bill 470: Personal Injury Bankruptcy Trust Claims, which would establish measures to increase transparency and fairness in North Carolina’s costly civil liability and bankruptcy trust system. Specifically, Senate Bill 470 would amend Rule 26 of North Carolina Rules of Civil Procedures regarding civil discovery in asbestos personal injury cases, requiring disclosures that are critical to fair asbestos trials. This legislation would simply necessitate that trust claims be filed prior to trial instead of after, promoting honesty in both trust claiming and civil litigation as claims materials would become admissible evidence in the civil action. Additionally, Senate Bill 470 tackles “double dipping,” which occurs when a plaintiff receives the needed payment from a tort system defendant to make them whole but then files trust claims and obtains additional damages for the same harm after the trial.
By establishing transparency in asbestos trust claims, this legislation would stop those attempting to game the system, while also expediting the receipt of trust payments by accelerating claim filings. Strengthening North Carolina’s legal climate with measures that foster certainty in the system is necessary in order to continue attracting investment and increasing the state’s competitiveness. The NC Chamber supports this bill and appreciates Senator Lee’s leadership on this issue.
Gary J. Salamido
Vice President, Government Affairs
North Carolina Chamber