First Responders Litigation Settles

The New York Times reports that In Re World Trade Center Disaster Site Litigation in the Southern District of New York has settled.  The case involved nearly 10,000 plaintiffs and at least 90 defendants.

The parties agreed that if 95% of the plaintiffs sign on to the litigation, then the settlement will go forward at $575 million.  If 100% agree, then the settlement will go forward at $654.5 million. This looks a lot like the Vioxx settlement in that sense.  It sets aside a $23.4 million "insurance fund" to cover future claims - those plaintiffs whose illnesses have yet to develop.

The amounts allocated to each plaintiff will be based on a points chart that will be administered by a neutral claims administrator on the model of the Sept. 11th Victims Compensation Fund.   The points will be based on illness severity and, according to the Times, "Other factors that will be considered include evidence of a link to ground zero and adjustments for age, pre-existing conditions, time of diagnosis and smoking history. The process could take up to a year."  The process is set up to weed out fraudulent claims.

The lawyers will get up to a third in fees, and the insurer that will fund this settlement has already paid over $200 million in fees  to defend the litigation.

How will they value the cases? They haven't held any bellwether trials (and they won't now) so it will be interesting to see what the basis of calculations will be.  A study of the Sept. 11th Victims Compensation Fund found that most people who disputed the forensic economists findings got higher compensation; and the judge has said that the amounts individuals get must be individualized and subject to his review even though the case is not certified as a class action. See Tinari et al, Did the 9/11 Victim Compensation Fund Accurately Assess Economic Losses?

I urge any readers with ideas or insights into this question to contact me via email.

ADL