W000753
November 26, 2001
Via e-mail at victimcomp.comments@usdoj.gov
and facsimile at (301) 519 5956
Mr. kenneth L. Zwick
Director
Office of Management Programs
Civil Division
U.S. Department of Justice
Main Building, Room 3140
950 Pennsylvania NW
Washington, DC 20530
Re: Comment Letter on September 11th Victim Compensation Fund of 2001
Dear Mr. Zwick:
This Comment Letter is respectfully submitted on behalf of Euro Brokers Inc., the inter-dealer broker subsidiary of Maxcor Financial Group Inc. (Nasdaq:MAXF). Our New York
offices were located on the 84th floor of Two World Trade Center. Prior to September 11th, Euro Brokers had approximately 300 employees in New York. We lost 60 of our employees (and one staff member who was a third-party employee) as a result of the September 11, 2001 terrorist attacks on the World Trade Center, including one employee who escaped the collapsing towers but died several weeks later from his injuries.
Of the Euro Brokers victims, 46 were married and 41 had children. Some of the spouses of our lost employees gave birth to children after September 11th, one spouse gave birth to her first child after September 11th and one spouse is due to give birth in the new year. A total of approximately 85 children were left behind. Some of our lost employees were engaged to be married. Some of our lost employees also provided financial support ot their parents or siblings. Our lost employees ranged in age from 23 to 58. Forty-eight of them were brokers at the firm,
with the balance holding a variety of positions, including senior executive, administrator,
operations and back office support personnel, facility management and information technology, The victims' annual compensation ranged from the mid-five figures into low seven figures.
We have dealt extensively with the families of our lost employees since September 11th and, though those dealings, have witnessed first hand the pain, grief, anger, frustration and
confusion many of them have felt-even with our help-in trying to negotiage the various and
complex legal and financial issues raised by the loss of their loved ones. Accordingly, we submit
this Comment Letter from the perspective that, to avoid compounding the trauma already
experienced by these families, simplifying the claims process established by the September 11th Victim Compensation Fund of 2001 (the "Fund") is an essential goal. We also believe that it will best effectuate Congressional policy objectives by encouraging the greatest number of families to elect the Fund process over private tort litigation.
Accordingly, we strongly urge the Attorney General and the Department ofJustice to
consider establishing a viable and non-binding "fast track" alternative to the 120-day process set
forth in the Fund statute. This alternative would be designed to enable employers of large
numbers of lost employees to, in essence, initially shoulder the burden of the Fund process
collectively on behalf of the families of the lost employees, and arrange for the families to
receive a quick proffer from the Fund of economic and non-economic losses-based solely upon
documentary submission from the employers, without a written submission by the claimant and
without a hearing. The proffer would be non-binding and the families would be free to accept the
proffer (less applicable collateral source compensation) and be bound to the waiver and release
provisions of the Fund, or reject the proffer and go through the regular 120-day Fund process, or
bypass the Fund entirely and reserve their right to bring a conventional tort action.
In conjunction with this fast track process, we believe it is essential that the Department
of Justice clearly define "collateral source" compensation, so that proffers can be evaluated
meaningfully. We also urge the Department to construe as narrowly as possible the definition of
collateral sources by, among other things, excluding charitable donations (including voluntary
employer donations) from the definition, in order to encourage fullest possible utilization of the Fund.
I. Fast track Simplified Claim Process
We suggest that in its implementing regulations the Department of Justice create a
simplified "fast track" claim process whereby employers of large numbers of lost employees
could submit to the Special Master the names, ages and earnings information (for some
minimum historical period) of each lost employee, which the Special Master could then input
into a matrix, applying assumptions about life expectancy, number of productive working years
in a particular industry and reasonable expectations as to compensation changes, etc., to
formulate a quick proffer of economic losses. This quick proffer by the Special Master would be
calculated using the employer's documentary submission, without any need for a hearing or
written submission by the claimant. To make the proffer fair and meaningful, it should be based
upon consistent application of the matrix assumptions and, in light of each victim's particular
age, vocation and compensation level, offer a level of compensation for economic loss that will
be perceived as being within the range of loss that could be expected to be awarded if the regular 120-day Fund process were utilized.
In conjunction with this fast track approach for calculating economic losses, we suggest
that the Department ofJustice establish a uniform minimum amount for non-economic losses for
pain and suffering for every individual lost in connection with the September 11th attacks,
regardless of where they were or the particular circumstances of their death, without imposing on the victims' families the need to endure a painful hearing detailing their loved ones' last moments and attempting to put a price tag on their suffering. This quick proffer of non-economic losses would also be made by the Special Master without any need for a hearing or written submission by the claimant. Again, to encourage as many claimants to utilize this fast track approach instead of proceeding with a full hearing under the Fund statute or a private tort suit, this proffer must be both fair and substantial.
Mechanically, the Special Master could then provide the employer with the individual
proffers of economic and non-economic losses for each of the employer's lost employees, which the employer would then pass on to the victims' families. As noted above, the proffers would be non-binding so that the families would be free to accept the proffer, less collateral source compensation received by the claimant, and be bound to the full waiver and release provisions of the Fund - or reject the proffer and either participate in the regular 120-day Fund process or bypass the regular Fund process and reserve their right to proceed with a private civil tort suit. Obviously, the decision whether or not to accept the proffer is one that the victims; families would have to make themselves.
Accordingly, the employer's submissions on behalf of its lost employees would not be a
claim "filed" for purposes of the Fund. The actual claim filing would only occur when and if the
family desired to accept the Special Master's proffer. At that time, a claim form more akin to that
which will be used in the 120-day process (albeit still simplified) would be needed, both to
establish the claimant's eligibility and his or her collateral source compensation, before funds could be released.
We do not believe that advance publication of matrix assumptions and uniform base non-
economic loss compensation figures would be an adequate alternative to the fast track process
we are proposing. We believe that claimants will want to have an individualized concrete
calculation of economic and non-economic loss compensation available to them before
committing to the Fund process and waiving substantive rights, and that merely publishing the
assumptions without providing a specific proffer is likely to cause claimants to take a wait and
see approach to see what sums are being awarded to others before deciding whether or not to
proceed with the Fund.
Although we recognize that there may be some families that will want to litigate, either
for emotional reasons or because they think it will maximize their monetary recovery, we believe
that there is a much larger group that will take a quick and fair recovery if the process is fair,
simple and applied even-handedly, produces substantial results, and permits them to avoid the
emotional pain of participation in potentially prolonged hearings and submissions of evidence (including consulting with and retaining a panoply of experts to prove economic loss and pain and suffering of the victim).
We believe that this fast track approach will also have ancillary benefits for the
Department of Justice, in both time and resources, by likely reducing the number of cases the Special Master will have to hear, and for employers who have sustained large employee losses by avoiding their need to dedicate substantial time and resources in connection with presentation of documentary and testimonial evidence at multiple individual hearings.
II. Collateral Source
As a further incentive to the victims' families to use the Fund process, we urge the
Department of Justice to construe as narrowly as possible the term "collateral source" in
calculating the amount to be reduced from compensation awards, and to specifically exclude
charitable donations (including voluntarily employer donations, whether in the form of continued compensation payments or otherwise) from the definition of collateral source.
Although we recognize the compensatory nature of the Fund, we think that the policy of Congress is best effected by fair and broad use of the Fund. In this regard, we believe that reducing Fund compensation by amounts received in charitable donations will discourge
victims' families from using the Fund and encourage private tort suits because, among other
reasons, collateral source compensation is not reduced from an award of punitive damages, and punitive damages are available in a private tort suit and not under the Fund. Deducting charitable donations from Fund awards will, in essence, penalize the victims' families for accepting the donations. Deducting charitable donations from Fund awards will have the further undesirable effect of deterring charitable donations. millions were pledged in donations to reach out and help the victims families - not to subsidize the government in awarding compensation to the victims' families.
Charitable donations should be excluded from the definition of collateral source as a matter statutory construction as well. While section 402(4) of the Fund statute specifies life insurance and pension benefits as collateral sources, it makes no mention of charitable donations. Moreover, section 405(b)(6) states that the Special Master shall reduce the compensation award by collateral source compensation the claimant "has received or is entitled to receive". Plainly, no one is "entitled to receive" charitable donations from organized charities, employers, friends or family. Nor does it make sense to force the victims' families to delay their receipt of charity until after they have received their Fund award to circumvent the "has received" language in the statute.
We further suggest that the Department exclude from the definition of collateral source
any vested interests in life insurance, pension funds, IRA funds, 401(k) plans and other benefit
plans. First, as a matter of statutory construction, section 402 of the Fund statute defines the term
"collateral source" to mean life insurance, pension funds and other payments "related to the
terrorist-related aircraft crashes of September 11, 2001." Similarly, section 405(b)(6) states that
the Special Master's compensation award shall be reduced by the amount of collateral source
compensation the claimant has received or is entitled to receive "as a result of the terrorist-
related aircraft crashes of September 11, 2001." Vested interests in life insurance (e.g., current cash value of a whole life policy, as opposed to the death benefit payable theron), pension
funds, 401 (k) plans and the like are akin to regular savings accounts which generally are
available to the account holder at any time and are not dependent upon or related to the
September 11th terrorist attacks. Moreover, as a matter of policy, to reduce such sums from a compensation award would unfairly penalize those victims who assiduously worked to save and build their assets.
In any event, the term collateral source needs to be defined as specifically as possible so that the victims' families know full well what amounts will be reduced from the proffer of economic and non-economic losses that we contemplate with the fast track process described herein.
We thank you for the opportunity to provide these comments to you. We would be happy
to meet again in person with officials of the Department of Justice and/or the Special Master to discuss this fast track proposal and other ways which we, as an employer of a substantial number of victims from the September 11th attacks, can help the families of the victims.
Respectfully submitted
Euro Brokers Inc.
New York, NY