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The decision of the Association of Trial Lawyers of America to enthusiastically embrace the new system set up by Congress to compensate victims of the World Trade Center attack could come back to haunt the group, according to several New York area law professors. The new system contains several features that in the past ATLA has viewed as threatening the fundamental right to sue. Historically, ATLA has bitterly — and for the most part successfully — fought off a number of measures, among them a mechanism for bypassing juries, the elimination of punitive damages and an overall cap on liability, that are contained in the law Congress enacted on Sept. 21. “The new system may well be held up as a model for handling other forms of mass torts,” said Brooklyn Law School Professor Anthony Sebok, noting that ATLA and others in recent years had successfully fought bills that would have applied similar types of systems to the resolution of asbestos and tobacco cases. “Having embraced the new approach, the opponents of change may now have trouble explaining why similar measures shouldn’t be tried in other contexts,” said Sebok, a products liability expert. Reflecting on ATLA’s embrace of the new law, another professor said the group really had no choice but to go along with it, given the shock of the collapse of the twin towers of the World Trade Center and the huge damage suffered by the airline industry. “ATLA loves this the way you love a cobra,” the professor said. One likely feature of the new system that would be particularly useful in future mass tort systems, one professor said, would be the drafting of a grid standardizing awards for pain and suffering depending upon the victim’s circumstances. There has never been an effort to define national standards for pain and suffering awards, he said, while state legal standards and jury verdicts have varied widely. In a 1994 article in the New York Law Journal, Aaron Broder, a lawyer who specializes in representation of plane crash victims, reported a wide discrepancy in pain and suffering awards to passengers aboard the Korean Airlines jumbo jet that was shot down by a Russian fighter aircraft in 1983. Reviewing 10 awards to victims of the attack, Broder reported that the compensation for “nine minutes of pain and suffering” went from as low as $15,000 to as high as $1 million. However, Professor Samuel Issacharoff, who teaches complex litigation at Columbia Law School, disputed the notion that ATLA had opened the door to tort reform. “The attack on the World Trade Center transformed a civil negligence situation into a national security issue for which we accept collective responsibility,” he said. “It is extremely unlikely that there would be a willingness in other situations to use the public fisc to bail out private negligence,” Issacharoff predicted. Leo V. Boyle, ATLA’s president, said in an interview Friday that while “on the surface” it might appear that ATLA had changed course, it has in fact “not moved a single degree” from its historic mission of getting as much compensation as possible to tort victims. In this instance, he said, ATLA worked hard, to win approval of government financing for an “unlimited, uncapped fund.” When it comes to fighting private interests in the future that are seeking to limit victims’ rights, “ATLA won’t give one inch,” he vowed. KEY FEATURE A key feature of the dual track system set up by Congress in the new legislation is a limitation of liability to the amount of insurance carried by American and United Airlines, the two companies whose planes were rammed into the Trade Center towers. Published reports have put the amount of that combined coverage at $3 billion. Several professors said that the combination of the limitation on the airlines’ liability, combined with the difficulties of establishing liability against other potential deep-pocket defendants, will force most of the victims’ families to seek administrative relief as opposed to pursuing claims in court. The law, Title IV of the Air Transportation Safety and Systems Stabilization Act, created a new administrative system that will give compensation to families of the more than 5,000 persons killed in the attacks without their having to prove any fault on the part of the airlines. The legislation calls upon Attorney General John Ashcroft to appoint a special master who will set up a process for reviewing claims and establish substantive rules for the award of damages, including pain and suffering and other forms of noneconomic injuries. Since the law specifies that the special master must adjudicate claims within 120 days, many tort lawyers expect that the special master will adopt a system employing the use of hearing officers to review claims. They also expect the special master to develop grids, incorporating a variety of factors, to set compensation levels. Only persons with personal injury losses can pursue administrative claims before the special master. All other lawsuits stemming from the attack, including subrogation claims that the U.S. government brings for funds it pays to victims in the administrative system, are required by the new law to be brought in the Southern District of New York under the normal fault rules of tort litigation. The claims for property losses will undoubtedly be substantial. The developer Larry Silverstein, who earlier this year leased the twin towers for 99 years, alone has suffered losses well in excess of $3 billion, according to sources close to him. In addition to the two doomed 110-story towers, Silverstein controlled 7 World Trade Center, which also toppled in the wake of the attacks. The total losses from the attack have been estimated to exceed $40 billion, including $9 billion in property losses and $11 billion for business interruption. Surveying that landscape, Professor Mark Gerstfeld, who teaches torts and insurance at New York University School of Law, said the new legislative scheme is likely “to funnel” claimants into the administrative system. With the prospects of recovering from other deep-pocket defendants remote, Gerstfeld said “the $3 billion is likely to go pretty quickly” and claimants relegated to “pennies on the dollar.” “There is going to be a very long line seeking recovery in the district court,” added Brooklyn Law School Professor Aaron D. Twersky. “I can’t see any rational person taking the chance of forfeiting a no-fault claim that the government is committed to fund.” AN ‘ILLUSORY’ CHOICE Given the dim prospects for recovery in the Southern District, Twersky, who teaches products liability and torts, said it is “illusory” to suggest that the new law gives victims a “voluntary choice” of proceeding either in court or before the special master. Lee S. Kreindler, of Kreindler & Kreindler, who has successfully represented crash victims in many cases against the airlines, agreed that in many instances the administrative path will be clearly the preferable alternative. Nonetheless, he cautioned, there may be instances where it makes sense for a victim’s family to take its chances with litigation. The new statute goes well beyond New York law in offsetting insurance recoveries against any awards, he pointed out. As a result, he said, he would likely advise families, in situations similar to one he counseled recently, to sue. Because the victim in that instance was a very high wage earner who had a large life insurance policy, it would be “next to pointless” to pursue an administrative claim. Broder said the administrative system was unlikely to compensate families in amounts anywhere close to the $14 million he won for a family who lost a loved one on Pan Am Flight 103, which was blown up by terrorists in 1988 near Lockerbie, Scotland. In addition to the airlines, Broder pointed out, there are a number of potential deep-pocket defendants, including the Massachusetts Port Authority, which was responsible for security at Logan Airport in Boston, the departure point for two of the hijacked airliners; Boeing Co., the manufacturer of the planes with cockpit doors that were easily breached; and the owners of the south tower, whose agents gave a faulty instruction that it was safe for workers to return to their desks.

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