The following article explains what you need to know… the lawsuit the article talks about was thrown out by the judge who heard it.
“The Impossibility of Making Whole,” The Economist (April 12, 2003)
“IN THE desperate days after the collapse of the World Trade Centre and the attack on the Pentagon, America’s Congress enacted an emergency compensation plan. This would not only recompense victims of the attacks but also spare America’s airlines litigation costs, likely far to exceed their insurance cover. The price tag is not yet known, but it will certainly run to billions of dollars. However, the plan has already raised many questions about how to compensate victims of such attacks. On April 14th it will be challenged in a federal court in lower Manhattan, not far from where the twin towers stood.
During the year that the victims’ compensation fund has been in existence, it has settled 202 claims, averaging $1.4m, in respect of those who died. The largest payment has been $6m; the smallest, $250,000. Another 1,300 claims have been submitted, so that half the 3,100 deaths stemming from the catastrophe have been resolved or soon will be. By the measure of “normal” airplane crashes, which can take more than a decade to resolve, this is an extraordinary success.
Even so, the approach followed by the fund is controversial. The wide variation in payments has caused a predictable outcry. Why, ask newspaper editorials, should the lives of firefighters and police officers be worth less than those of bankers? Yet the challenges to the plan are being brought by the families of the wealthiest victims, whose lifetime earnings would have been colossal. The settlement, they say, does not give them enough.
The fund has tried to meld the notions of private tort law, used in common insurance cases, which seeks to “make victims whole” and to discourage future incidents by placing a cost on harm, with the quite different ideas that motivate government help, namely the financial needs of the recipient and the desire to minimize the disparity between rich and poor. Total payments are limited only by the discretion of the fund’s administrator, a special arbitrator appointed by the government.
Traditionally, victims have no right to recover damages from the government, even if it is at fault. After other terrorist attacks–the bombings of a federal building in Oklahoma City, two American embassies in Africa and, in 1993, of the World Trade Centre itself–government played only a minimal role in trying to compensate the bereaved. Efforts to include these earlier events in the new fund gained momentum early last year, but have since faded, probably for good.
The treatment of the victims of September 11th is also quite different from that of soldiers in war. Members of America’s armed forces pay $20 a month for life-insurance polices paying out $250,000 in the event of their deaths. Widows and widowers also receive $948 a month; each child gets $237. This indemnification has been steadily increased, reaching its present level last year, but still pales next to many of the World Trade Centre settlements.
There were any number of ways a September 11th compensation scheme could have been designed, notes George Priest, a professor at Yale Law School. In the circumstances there was a good argument for paying the same for each person who died, roughly in line with the policy used by the armed forces. In tort actions, something would be lost by doing this: damages that, in effect, place a high price on individual deaths can deter defendants from repeating their behavior. In this instance, however, this is irrelevant. The American government, not the perpetrators of the attacks, is picking up the bill.
However, the September 11th compensation plan is also a substitute for lawsuits against airlines, the World Trade Center’s owners and others, such as providers of security at Boston’s Logan airport, where some of the terrorists boarded. Given the state of these battered companies, it was a compelling offer for the claimants, as well as the government, which wanted to put litigation to rest.
As a result, the compensation plan has taken on the kind of liability-based calculations that would normally be used after an airline disaster. Congress authorized the use of the normal methodology in such cases, which takes into account economic damage (meaning the loss of future earnings) and non-economic damage (suffering, including the “loss of enjoyment of life”). Inevitably, such a scheme gives wealthier victims more than the poor. But whereas air-crash settlements are usually thrashed out in secrecy, anything involving September 11th has received minute scrutiny. The outrage that has followed is no surprise.
In response, the special arbitrator, Kenneth Feinberg, has limited settlements for richer victims. According to generally accepted formulae, these could have exceeded $10m, given the earnings of many working in the World Trade Centre. These same formulae could have pushed sums at the bottom end below $250,000, the minimum paid so far. Mr. Feinberg has departed from these calculations by including in his figures a determination of “need”, a fuzzy concept that is neither part of tort law nor mentioned in the act that created the fund.
To produce his results, Mr. Feinberg has been cagey about the formula he has used in high-end cases, and has seemed tight-fisted. Beneficiaries of the wealthiest victims have consequently been irate. All of the litigants against the plan are challenging impediments to higher settlements. Although only three cases have been filed, lawyers for many other victims are waiting until the first batch has been heard. A ruling is expected soon, allowing for an (inevitable) appeal and then a decision by December 21st, the deadline for participation in the fund.
As this litigation plays out, another lot has begun. Only people who were at the World Trade Centre within 12 hours of the plane crash and given medical care within 72 hours qualify for the fund. This excludes many rescue workers who spent days in the swirling fires and toxic fumes of the wrecked building and who now have a hard time breathing. Efforts have been made to extend the acceptance period, so far without success.
New York City has asked the federal government for retrospective insurance to cover these workers and has similarly come up empty. There are thought to be more than 1,000 claims. The workers are already suing the city. Maybe they should threaten to sue an airline too. In any case, will such people be better cared for if (heaven forbid) disaster strikes again?”
- Does a victim of a disaster deserve some sort of compensation? From whom should this compensation (if any) come? What kinds of disasters would qualify?
- How “near” to a disaster should someone have to be to be eligible for some sort of compensation? How would one measure such nearness?
- Is it possible to set a cash value for a human life? Is it a good idea to try, whether or not it’s possible? If so, when; if not, why not?
- There are at least two models for compensation available: (a) by your loss, where the loss of an arm is worth more compensation than the loss of a finger but less than loss of both arms. Worker’s compensation laws work like this; and (b) by your future earning, where the loss of a CEO’s arms is worth more compensation than the loss of a McDonalds worker’s arms. Social security works like this. Produce a list of advantages and disadvantages to each.
- Consider the following worry by the fund’s administrator: “Are we creating a slippery slope?” Feinberg asked. “Why not Oklahoma City? Why not the African Embassy bombings? Why not the first World Trade Center? Why not anthrax? Or is it unique; sort of a one-shot thing Congress did and will not be repeated. I think it is a very good idea, it is sound public policy” (qt. Chicago Sun Times, 4/29/03, p. 60). Are the 9/11 attacks unique? Construct an argument showing either that the 9/11 attacks are unique, or that some sort of compensation is warranted for other attacks.
- Is it right to encourage people not to sue the airlines over 9/11 security issues?
- What function does compensation serve in grieving? What does it mean to “make victims whole?”