An initiative by Senate Republicans designed to head off an anticipated deluge of litigation against American corporations has met with bi-partisan resistance and has been removed from the Senate order paper.

Senate Republican leader Bill Frist called a vote to determine whether the “Asbestos Bill” will be taken up on the Senate floor. The bill was intended to put an end to asbestos lawsuits by providing a fund for victims of up to $124 billion. However, the Senate was divided in its opinion as to the adequacy and timing of the initiative. It fell 10 short of the 60 votes necessary for the bill to be debated.

Democratic Senate Leader Tom Daschle says victims of asbestos-related diseases will number 1.2 to 2.5 million in the next 25 years, and believes compensation provided by the fund would have been inadequate. Other Democrats suspected the bill’s intent, pointing out that the fund would nullify pending court cases.

Vermont Senator Patrick Leahy, the ranking Democrat on the Judiciary Committee, was scathing in his criticism of the legislation, dubbing it the “Halliburton Relief Act” or the “WR Grace Act.”  Both the oil giant and the chemical company – which has filed for Chapter 11 bankruptcy protection – are assessing thousands of asbestos-related compensation claims. Halliburton has a $4.3 billion settlement pending, while WR Grace is assessing 5,000 claims.

Senator Frist pushed the vote forward because he believes the issue requires decisive action in order to unblock a system backed up with claims, bankrupted companies and ill claimants who have already been waiting too long. “Litigation has run amok”, he said.  “It is time to fix what has become an embarrassingly inadequate system to compensate victims.”

The American precedent will be watched with keen interest in Australia, where current workers’ compensation arrangements will be inadequate to deal with the anticipated increase in asbestos-related cases – already the most expensive litigation in the United States.