W000344
Friday, November 09, 2001 3:26 PM
Fw: Comments on Proposed Rules under the September 11th Victim Compensation Fund
Sent: Friday, November 09, 2001 2:57 PM
Subject: Comments on Proposed Rules under the September 11th Victim Compensation Fund
The following comments are submitted pursuant to the Notice of Inquiry and Advance Notice of Rulemaking with respect to regulations implementing Public Law 107-42 establishing the September 11th Victim Compensation Fund of 20001.
INTRODUCTION
The basic thrust of my comments are to call attention to the work of the Presidential Commission on Catastrophic Nuclear Accidents, and to its Report to Congress, volumes 1 and 2, dated August, 1990.
While this report submitted pursuant to the 1988 amendments of the Price-Anderson Act, (Public Law 100-408) was a comprehensive study of the appropriate means of fully compensating victims of catastrophic nuclear accidents (greater than approximately $7.3 billion) many of the issues addressed in the rulemaking to implement the September 11th Fund were considered in detail in this report from both a legal and public policy aspect. Specifically, with respect to one of the most important issues, the Presidential Commission considered the degree to which payments from collateral sources should be used to offset recovery through a judicial process containing administrative features designed to speed the resolution of cases. The administrative process set forth in the September 11th Fund legislation follows very closely the system set forth in the Presidential Commission report.
COLLATERAL SOURCES
On pages 93 to 95 of its August, 1990 report the Presidential Commission on Catastrophic Nuclear Accidents recommends that payments from collateral sources should not be used to offset recovery except when a claimant has demanded plenary adjudication (i.e. trial rather than than the proposed administrative claim resolution process). Further, the Presidential Commission recommended that in no case should proceeds from life insurance policies be used to offset recovery.
I recognize that the September 11th Fund legislation in Section 405 (b)(6) provides that the Special Master shall reduce the amount of compensation ... by the amount of collateral source compensation the claimant has received or is entitled to receive as a result of the terrorist attacks. While the definition of collateral source means all collateral sources including life insurance, pension funds, death benefit programs and payments by Federal, State or local governments, an open question is whether collateral source compensation includes receipts from charitable donations. In this regard, the consideration of the pros and cons of subtraction of collateral sources in general discussed by the Presidential Commission on pages 93 to 95 of its report, are germane.
The Presidential Commission noted that the collateral source rule usually bars a defendant from introducing evidence that a claimant had received compensation from collateral sources such as insurers or governmental benefit programs. The rationale seemed to be that the defendant (called the tortfeasor in the report) should be required to pay the full extent of the damages his conduct had caused, and should not benefit through a reduced award as a result of any compensatory payments received by the plaintiff from third parties. The Presidential Commission noted that "although double recovery arguably produces a windfall for the plaintiff, the rule reflects the value judgement that it is preferable to overcompensate a victim than to inadequately penalize a wrongdoer."
The Presidential Commission noted that with tort reform, the collateral source rule has increasingly been subject to debate. At the time of the 1990 report it was noted that 25 states and two federal statutes had restricted or abolished the application of the rule. The Presidential Commission felt that the collateral source rule should have little force under the special scheme of the Price-Anderson Act because compensation, rather than deterrence, is the principal goal of the Act. Further, the retributive function of the collateral source rule is also not relevant in the Price-Anderson context because losses are borne by the entire nulear industry and its ratepayers rather than by the tortfeasor.
Nevertheless,reducing awards by the full amount of collateral recovery was viewed by the Presidential Commission as possibly raising substantial considerations of fairness. Where collateral protection has been obtained through the payment of premiums for insurance, for example, reducing awards by the full collateral recovery would result in net economic loss to the claimants.
While the Presidential Commission did not consider charitable contributions in its analysis (a non-issue with respect to nuclear accidents) the fairness argument would seem to apply to charitable gifts. The charitable contributions were made by individuals and organizations irrespective of what other compensation, whether through the September 11th Fund system or through lawsuit, the plaintiffs might receive. An after-the-fact use of these funds to reduce taxpayer burden was probably not one that was contemplated by the charity contributers and in at least with respect to this collateral source, the possible "evils" of so-called overcompensation (if such a concept could even exist in the case of these horrendous deaths) must yield to basic fairness for the plaintiffs.
OMBUDSMAN
While not considered in the Presidential Commission report, the regulations under the September 11th Fund legislation should acknowledge that the use of the fund will entail questions of sensitivity and tact that may be overlooked in the legally-driven compensation scheme with a 120 day deadline for awards. For this reason, I recommend that the rules establish at the ouset an Office of Ombudsman, not as another source of special pleading, but as an assistant to claimants and others through the bureaurocratic maze.
PART-TIME AND VOLUNTEER ASSISTANCE
These are new and untried approaches both for the plaintiffs and judicial and executive governmental bodies involved. The special master and others involved in carrying out the provisions of the statute should look to experienced persons who have been involved in consideration of the pertinent issues in these and other compensation schemes to assist on a part-time compensated or volunteer basis.
Individual Comment
Bethesda, MD