The massive lawsuit regarding the September 11 World Trade Center attack and the 10,000 claimants has settled for the second time. The first settlement, in March of this year, was rejected by District Court Judge Alvin Hellerstein who demanded that the plaintiffs’ attorneys lower their legal fees from 33%. The new settlement has a minimum value of $625M with 95% participation by the claimants, and as much as $712.5M if other conditions are met. The original settlement was for $575M to $657M.
As I first reported on May 28th, the legal fees are being cut to 25%. In addition, the insurance company is ponying up an additional $50-55M, that matches the drop in legal fees. In addition, Workers’ Compensation liens will be waived, which also increases the amount of money that plaintiffs will receive.
These are the details of the new settlement:
• Plaintiffs’ attorneys cap fees at 25%, reducing fees by over $50 million
• WTC Captive Insurance Company to pay up to an additional $50 to $55 million
• Certain workers’ compensation liens against settlement recovery will be waived, giving benefit to many plaintiffs and ensuring that they will continue to receive future benefits with no reductions
• The most severe asthma claims could receive $800,000 to over $1 million dollars, or more if the individual is found disabled as a result of injury
• Former Special Master for the September 11th Victim Compensation Fund Kenneth Feinberg will serve as Claims Appeal Neutral
• Settlement creates path for other defendants and insurers to follow in settling some claims, facilitating recovery of significant additional compensation
This is a tremendous result for plaintiffs’ counsel – a consortium of firms going by the name of Worby, Groner, Edelman & Napoli. The firm had been infuriated in March when the judge demanded that they lower their fees before he approved the settlement, and the firm in turn demanded to know why they were the only ones to receive that request.
And now it seems that their staunch position that others must contribute has paid off. The winner in all this legal jockeying is clearly the 10,000 claimants.
Ken Feinberg, who had overseen the September 11 Victim Compensation Fund and who then went on to become the nations executive “pay czar” for bailed out companies, will oversea the claims process.
Claimants will receive as much as $1.5M in the case of death to as little as $3,250 for those that have the fear of future injury but have not shown symptoms. They will also will be enrolled in a special insurance policy through MetLife to provide coverage for certain blood and respiratory cancers diagnosed during the coverage period, paying a benefit of up to $100,000.
A neutral third party will oversee the valuation of each claim, assisted by a panel of independent physicians. The Garretson Firm Resolution Group, an experienced claims administration company, will fill this role with Feinberg acting pro bono to handle any appeals.
The insurance company paying the settlement is the WTC Captive, created with a $1 billion grant from the Federal Emergency Management Agency to insure the City of New York and its debris removal contractors because in the aftermath of 9/11 the City of New York was unable to procure an adequate amount of liability insurance coverage in the commercial insurance market for the World Trade Center site rescue, recovery and debris removal work.