N002296
Tuesday, January 22, 2002 3:43 PM
Comments on Interim Final Regulation - Victim Comp Fund
January 22, 2002
BY E-MAIL (victimcomp.comments@usdoj.gov)
Kenneth L. Zwick
Director, Office of Management Programs
Civil Division
U.S. Department of Justice
Main Building
Room 3140
950 Pennsylvania Avenue, N.W.
Washington, DC 20530
Re: Comments – Department of Justice Interim Final Rule – September 11th Victim Compensation Fund of 2001 – 28 CFR Part 104
Dear Director Zwick:
The American Insurance Association (“AIA”), a national trade association representing more than 410 property and casualty insurers, appreciates this additional opportunity to provide comments on the implementation of the “September 11th Victim Compensation Fund of 2001.” (“Fund”). On November 20, 2001, AIA submitted comments in advance of the Department of Justice’s (“Department”) proposed rulemaking establishing the Fund. Those comments focused on several aspects of the substantive operation of the Fund. Comments sent under separate cover discussed the procedural aspects of the Fund.
We have reviewed the interim final rule published on December 20, 2001 and respectfully request reconsideration of one issue raised in our November 20 comments, but not adopted under the interim final rule: the deductibility of collateral source compensation from economic damages awards only, rather than the entire gross value of the award.
The goals established by Congress when it created the Fund were to both quickly and fairly compensate victims of this terrorist incident and to minimize the amount of personal injury litigation that would otherwise be filed. Because the enabling law requires that the Fund take credit for certain collateral sources, such as life insurance, which ordinarily are not at issue in a tort suit, there is a very real possibility that some victims will actually be awarded nothing from the Fund. If a decedent had substantial life insurance and pension benefits, the value of these resources could easily exceed the gross amount of any award if collateral sources are subtracted from the gross calculations. A fairer approach, and one that furthers the intent of Congress, would be to subtract collateral sources solely from economic damages. Then, regardless of collateral sources, all victims and their families can be awarded at least the value of their non-economic damages.
Further, as we noted in our earlier comments, reducing the economic loss portion of the Fund award by collateral source compensation is consistent with New York’s statute on collateral source deductions in personal injury, property damage, or wrongful death cases. See McKinney’s CPLR § 4545(c). Under New York law, in such cases, the court must reduce the amount of any economic loss damages award where the economic loss will, with reasonable certainty, be replaced by or indemnified from any collateral source, such as health insurance benefits (minus those collateral sources that are liens against any recovery of the plaintiff). Further, no category of collateral source listed in Section 402(4) or mentioned in the interim final rule is intended to offset non-economic loss.
Maintaining consistency with state law regarding collateral source deduction (in harmony, of course, with the Act) will ensure that the Fund remains a viable alternative to litigation. More important, it will give victims of the September 11 tragedy and their families a measure of economic comfort, knowing that the Fund will provide guaranteed compensation for non-economic loss and will do so in a manner that avoids the microscopic examination that takes place during the trial process.
We would be happy to discuss this or any other issue related to the Fund with you directly, and AIA looks forward to assisting the Department in the future.
Respectfully submitted,
Comment by
American Insurance Association
Washington, DC