The Rules for Victims’ Comp

In the wake of Sept. 11, Americans are turning to leaders, including many among the legal profession, for answers to some of the most difficult questions ever posed to a nation.

Almost immediately after Sept. 11, America’s lawyers sprang into action. Trial Lawyers vowed not to rush to the courthouse. Pro bono centers were set up throughout the country. The president of the American Bar Association created a Task Force on Terrorism and the Law to advice Congress, the Department of Justice and the special administrator of the victims’ compensation fund on the rights of those most directly impacted by the events of that tragic day and on how justice can best be dispensed.

I was honored to be selected as the task force’s chair. We met numerous time in the months following the calamity, drawing up draft regulations, speaking to member of Congress, advising those who lost loved ones in that day’s events. A day has not gone by when the legal profession hasn’t played a role in attempting to assist our leaders to determine the proper course of action.

The end result of the regulations has been labeled everything from "eminently fair" to " a travesty." I view it positively with some major disappointments.

Although each case will be examined individually and refinements in the regulations are expected, it has been reported that the "typical" family will recover an average of $1.6 million.

Kenneth Feinberg, appointed by Attorney General John Ashcroft as special administrator, recognizes the complexity of modern family finances and has stated that the formula to calculate the payout is merely a guideline and not a one-size-fits-all solution. And that is heartening.

A closer examination of the regulations indicates that although there are many admirable and well-thought-out parts of the plan, there are some built-in inequities. High earners, low-wage earners, firemen, policemen, and others caught somewhere in the middle are treated harshly by the formula.

Not only do the regulations deduct pension plan payments, Social Security and life insurance benefits, they have arbitrarily assigned a uniform $250,000 payment for non-economic damages for the pain and suffering of each victim with an additional $50,000 payment for a surviving spouse and each surviving child of those killed in the Sept. 11 attack on America.

Nor do the regulations consider other non-economic damages typically considered in civil litigation, including loss of parental guidance and household services. Charitable contributions will not be counted against a recovery, and people can opt out of the plan altogether and pursue their rights in court. Accepting a payment from the fund waives one’s right to sue. As of this writing, one lawsuit has been filed (related story, page 16).

Under the initial plan, many of the New York firefighters who died saving victims in the World Trade Center are likely to receive nothing. By law their generous life insurance, pensions, and similar benefits will wipe out that expected payout. These men and women toil for no perks and bonuses, working nearly every weekend or holiday, in the hopes of one day recouping it in the end with a comfortable retirement only to find they are, in essence, penalized for unhesitatingly putting their lives on the line.

The regulations also inequitably impact families of well-insured corporate executives who typically carry generous life insurance benefits that, although not capable of maintaining a lifestyle the major wage earner could provide, likely will offset everything a family would expect to receive from the fund.

Putting a price on a human life or human tragedy is not an easy task, but those charged with apportioning the estimated $6 billion fund must address these disparities.

What this country has accomplished for those most severely impacted by the events of Sept. 11 is admirable. Charitable contributions top $1.5 billion . We have come together as a nation to offer financial security for the thousands of families who lost loved ones.

Although our country is forever changed as a result of these evil acts, we must work toward achieving a new unity, working through consensus rather than through intimidation, fear and terror by the few. But, at the same time we must not be afraid to step up to the plate and help those who are facing that world alone or injured by the horrible events of that day.

As lawyers we must do so committed to civility, professionalism and principled justice. We must be a constant source of advice, direction and counseling while being levelheaded and respecting the economic, religious, cultural and ideological differences that comprise this great land.