W000480
Wednesday, November 21, 2001 4:25 PM
comment- Victim compensation fund
My name is , and my wife died on September 11th in 2
WTC. After reading the text of the legislation regarding the September 11
Victim Compensation Fund and doing some research into the topic I would like
to make a few comments. Please feel to respond to the email address above
or call me at
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One must note that as part of the overall legislation, both United and
American Airlines were protected from any legal damages incurred above the
amount of their liability insurance, assumed to be about $3 Billion each.
Those who wish to file suit against the airlines for property damage losses,
business interruption, or costs associated with relocation and clean up,
must all be adjudicated from this amount. After the insurance money is
distributed, any and all further claimants are out of luck. It also makes
it impossible to sue for punitive damages because under New York State law,
insurance monies may never be used to pay for punitive damages and only
insurance money will be available. So, no matter what should be discovered
during the course of the investigation and trial, and despite the fact that
there had been warnings of a possible terrorist act and at least 4 known
plots involving the use of an airliner as a weapon being discovered in
recent years, the airlines themselves are not actually liable for anything
at all.
Similar wording has been inserted in the form of an amendment to the
recently signed airline security legislation that would give the same
protection (liability only to the limit of insurance coverage) to every
other potential lawsuit target except for the airline security companies and
Osama Ben Ladin himself. Yes, even though building management in The World
Trade Center told people in Tower 2 to return to their desks. While it can
be said that they did not know of the second plane, it should have been
obvious that as the fire gutted Tower 1 that the situation was unstable.
The Port Authority of New York and New Jersey is similarly protected,
although during discovery it could be determined that they did not have an
adequate evacuation policy in place.
Victims and their families are also expected under this scheme to receive
monies from the fund quickly, as the law states that the office of The
Special Master must give a ruling on any determination no later than 120
days after the claim is filed. Payment must be authorized in no more than
an additional 30 days. The system is faster, potentially cheaper and does
not force the claimant to proved proof of any wrongdoing on the part of
anyone. But of course there may be a catch or two. And they may be huge.
The first one is that in order to make a claim you must first waive all
right to be involved in any suit anywhere against anyone regarding the
attacks. That?s right anyone and anywhere. You cannot file suit against
Osama Ben Ladin and still make a claim despite a 1998 law that deals with
precisely this type of situation. And you must do this before finding out
what the potential payout might be. In other words the government expects
you to accept a settlement offer without having any idea what, if anything,
you will receive. Blind faith in the system is a requirement of the system.
And that leads to another problem. There are no appeals allowed. If you
file and do not like the decision, you are already locked in to the system,
you cannot then decide to file suit due to the waiver you have signed and
you have no further recourse.
Collateral Sources. The law states that any amount that the victim or their
family would receive from the fund would be offset by any collateral
sources. Among the sources specifically listed in the law are life
insurance, death benefits and pension funds. So for the families of
victims who have passed away in the tragedy of September 11, this would
result in the very clear possibility that if they did substantial advanced
planning for the future, they would receive less than those that did no
planning at all. And this begs a few questions:
First, why should those who did plan ahead be penalized for doing so?
What about the money paid for the insurance? Would the premiums be allowed
as an economic loss, and added to the award?
Why would pension funds, which were monies saved over time by the victim, be
a collateral source? Wasn?t this already their own money?
The regulations and laws governing New York State Workers Compensation state
that any payments made by them would also be offset by collateral sources,
though in that case they refer to medical payment made directly by insurance
or litigation settlements. Will they expect to be able to reduce their
awards based on the amount received from the fund? Will the Special Master
consider that a death benefit? Will both attempt to reduce the amount
provided for?
What about payments made over time to the victims and their families? How
will this be calculated? Will this be considered a collateral source? What
about Social Security?
What about charity money? Is this a collateral source?
Is it fair to deduct any amount from what is in effect the settlement of a
lawsuit using an Alternative Dispute Resolution system?
In the case of the money distributed by charities, the answer is likely to
be no, it is not a collateral source. There are many public policy and
legal reasons to not include it, and I think that The Special Master will
want to get involved with this. But the rest of the questions need to be
addressed.
The mechanism and procedures required for filing are now being addressed and
must by statute be completed no later than December 21, 2001. The Justice
Department is currently requesting comments on these procedures at their web
site.
For my part I would like to make the following recommendations:
Do not force people to sign the waiver before finding out the amount they
can expect to receive. No attorney worth his malpractice insurance would
advise a client to dismiss their case or sign a settlement agreement based
only on a vague promise that there is a possibility that they might receive
some amount of money in the future. It would be far simpler to have a
statement on the stub of the check indicating that the person endorsing the
check read the back carefully, with the actual waiver on the back of the
check. By endorsing the check, the claimant would also be accepting the
full ruling of the Special Master.
With regards to proof of claim, the same information and affidavits filed
with the city in order to receive a death certificate should suffice. For
injured people, there would be an easily obtainable hospital record. The
government already has the financial information on most of the victims
through tax records on file with the IRS. Use this information first and
allow the claimant to add additional information as the situation arises.
Do not reduce the amount by any form of collateral source compensation for
the reasons listed above. This may require an act of Congress to be
achieved. If this is not possible, please take into account the points
brought up in the above section.
At the very least, out of respect for the victims and their families, do not
consider any amount of charity money. Trying to keep accurate records in
the middle of a crisis is difficult enough without thinking that you may
have to justify these amounts later.
From here we can go in one of two directions. The government can be
generous and take into account the feelings and concerns of the families,
and in the process make substantial monies available to the victims and
their families. If this was done, the claimants would have very good
reasons for not suing the airlines, the goal of the overall legislation and
everyone would feel that they were dealt with fairly. On the other hand, it
could become a morass where victims and their families may be left with no
legal recourse or form of redress, a settlement that is at best inadequate
and at worst no compensation at all for their loss. The image of the
situation will then rightly be that our elected leaders failed us and
decided that the airlines and their shareholders were protected at the
expense of the victims of their failure to protect and secure their own
planes.
Individual Comment