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Now that the U.S. Department of Justice has issued final rules for compensating families of Sept. 11 victims, the time for litigating is here. Lawyers predict that most families will choose the federal compensation program, which promises quick and sure recoveries, although detractors complain it is too stingy. Some — no one will predict how many — will take their chances on bigger recoveries in court that they may be hard-pressed to collect. And some families, unhappy with both of these options, may go to court to try to get the whole system scrapped. What is clear is that, six months after Sept. 11, Ground Zero is no longer a largely lawyer-free zone. “The time for comment and debate is over,” said Kenneth Feinberg at a Justice Department press conference to unveil the final draft of the rules on March 7. “The program, I continue to believe, is vastly superior to any litigation alternative,” he said. Feinberg is the Washington, D.C., lawyer appointed to oversee the compensation program. “Hopefully it will help a lot of people,” says Mary Schiavo, reacting to the new rules, “but I feel that a lot of people will be left out.” Schiavo, a former inspector general for the U.S. Department of Transportation and a well-known critic of airline safety, represents nine claimants who have already filed lawsuits in federal court against the airlines and airport security companies. SUITS TO COME Schiavo says that her Los Angeles firm, Baum, Hedlund, Aristei, Guilford & Schiavo, has already advised 130 families. She predicts more suits, from her clients and from others, particularly now that the compensation program is in place. The September 11 Victim Compensation Program is part of a $15 billion airline bailout passed in September. The law commits the federal government to pay compensation for people killed or injured in the Sept. 11 terrorist attack, and promises checks within 120 days of filing. The government estimates the program will cost about $6 billion. Many of the changes were intended to address some of the criticisms directed at an earlier draft of the rules, issued in December. The new regulations: � Increase, from $50,000 to $100,000 per child or spouse left behind, the amount of noneconomic, or pain and suffering, damages. These payments are in addition to the $250,000 pain and suffering damages for each victim. The rules include tables to calculate presumptive awards for economic damage, based largely on age and income. � Increase the average award, from $1.65 million to $1.85 million before deducting death benefits. � Permit families to consult with program administrators to determine a ballpark award figure before deciding whether to enter the program or to sue. � Spell out the types of death-related benefits, or collateral sources, that will be deducted from the awards. � Widen the time frame after the airliners were crashed, from 24 to 72 hours, in which injured civilians must have sought medical attention to be eligible. Also, a 72-hour window for rescue workers was changed, allowing it to be waived on a case-by-case basis. In addition, Feinberg suggested that, while there is no formal minimum recovery, he will ensure that claimants generally receive no less than $250,000, even if deductions would otherwise reduce the awards to zero. Under the compensation program, claimants do not have to prove fault, which many lawyers say would be difficult or impossible for most of the victims to do. But the recoveries may be much less than claimants could win in a lawsuit. Claimants may reject the plan and take their chances in court, but punitive damages are not available. And most of the likely defendants — the airlines, airport operators, aircraft manufacturers and the city of New York — have had their liability capped by Congress. So any lawyer who wins a verdict from one of these parties may end up collecting only a fraction. Schiavo says the federal program is geared primarily toward people with low and medium incomes with lots of kids. Those most likely to sue are people with high incomes and people whose awards would get eaten up by big life insurance payouts and other death benefits, which are subtracted from the awards. Passengers on the four crashed airliners have a stronger case than victims on the ground and may also decide to sue, lawyers say. Donald Nolan, a Chicago plaintiffs’ lawyer who had filed the only other wrongful-death case targeting the airlines, does not think the regulations go far enough in addressing the complaints of Sept. 11 families. “The fund has been tweaked to make it more attractive to some people,” he says. But the money is still too low for some families, he says. According to Nolan, some are so frustrated with their options, they are discussing the possibility of challenging the system in court, on the grounds that Feinberg exceeded his authority under the statute or that the law itself is unconstitutional. Those efforts can move forward now that the regulations have been finalized, he says. But Leo Boyle, president of the Association of Trial Lawyers of America (ATLA), believes most families should sign up with the fund because there is not enough money to compensate everyone. “You have $3.2 billion of airline insurance and $40 or $50 billion in property damage in New York alone,” he says. “The property damage swallows up the insurance by more than a factor of 10.” ATLA has set up a program to provide free lawyers to anyone who files a claim. By the beginning of March, only 353 individuals had filed claims with the program. Lawyers expect many more will participate now that the regulations are in place. Boyle’s group lobbied for the right of claimants to present individualized proof of their damages, rather than having awards decided according to a strict grid. “I think that it’s a very positive step,” he says of the changes. “What has been done is a clarification of some of the ambiguities that people found in the original regulations.”

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