Asbestos Victims’ Compensation Plan Altered : Health: The restructuring of the Manville trust will slash attorneys’ fees and speed payment of claims.

A plan was unveiled today to restructure the Manville trust set up to compensate victims of asbestos by slashing attorneys’ fees and paying victims according to the severity of their disease.

The long-awaited plan is designed to speed payments to tens of thousands of workers nationwide who contracted cancer and other diseases inhaling fibers from Manville-made asbestos. Thousands have died before being compensated.

The restructuring plan, submitted today to U.S. District Judge Jack B. Weinstein, includes up to $520 million in new contributions to the trust by Manville Corp., which was driven into bankruptcy court in 1982 by its asbestos liability.

It also provides for dismissal of tens of thousands of lawsuits against the trust pending in state and federal courts across the country, potentially eliminating a huge backlog that has jammed judges’ dockets.

Weinstein is expected to approve the restructuring. He initiated a class action today consolidating all the pending Manville trust cases for resolution.

The plan caps a year of turmoil that began when the Washington-based trust ran out of cash to pay new claims and said some victims would not be paid until well into the 21st Century.

The trust has paid out more than $1.1 billion to settle nearly 26,000 claims to date. But an additional 130,000 claims are pending, and more are being filed daily.

Average payments to date by the trust have been more than $43,000. Under the plan, they are expected to fall 45% from what the trust had been paying for serious diseases.

Asbestos is a white mineral with natural insulation and heat resistance that was used widely for decades in shipbuilding, construction and other industries. A high incidence of cancer and other respiratory ailments attributed to asbestos began to appear in the 1970s.

Payments to all Manville claimants except those with urgent health or financial needs were suspended by Weinstein in July. They will not resume until the restructuring plan is reviewed by Weinstein and court appeals of the plan are completed.

But the plan marks a major step toward resolving asbestos litigation and is intended as a blueprint for dozens of other companies facing bankruptcy because of asbestos liability.

“These steps . . . will more effectively, efficiently and equitably compensate those injured by asbestos exposure,” Tom Stephens, Manville chairman and chief executive, said in a statement.

The plan provides for annual payments to claimants based on a percentage of the trust’s available resources. Claims are split into two groups: those for cancer and other serious asbestos ailments, and lesser diseases.

Payments will be made only to claims from the first group, known as Level One, during the first two years of the plan. An estimated 23,000 serious claims are expected to be paid in the first two years.

Level Two cases, of which more than 100,000 are pending, will begin to be paid in the third year of the plan.