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A handful of Texas trial lawyers spent years helping the United Nations evaluate claims from businesses, governments and individuals who allege they suffered damages as a result of Iraq’s unlawful invasion and occupation of Kuwait in 1990. The new war in the Persian Gulf could mean more work for the United Nations Compensation Commission and more opportunity for Texas lawyers — if the United Nations decides to entertain damage claims from new hostilities in Iraq. But new armed conflict more than a decade after the 1990-1991 Gulf War also could disrupt the flow of money from Iraq into the U.N.’s compensation fund. All that translates into uncertainty for the work of the UNCC, which is winding down its evaluation of claims stemming from the Kuwait invasion. Houston lawyer Matthew Kerrigan, who was a senior legal officer at the UNCC from 2000 through 2002, says the establishment of a new government in Iraq could mean changes to the system the U.N. set up in 1991 to process claims seeking compensation for those who suffered direct losses or damages because of Iraq’s invasion and occupation of Kuwait. A U.N. Security Council resolution in April 1991 found Iraq liable under international law for any direct loss as a result of its unlawful invasion. A resolution in May 1991 set up the UNCC. “There is no question the [U.N.] Security Council will have to think long and hard about what to do. The program could be modified, it could be suspended, you could even imagine circumstances in which it could be expanded or broadened for a period of time,” says Kerrigan, a partner in Houston’s Werner & Kerrigan. “The only thing that is certain is that there will be a sweeping review of the [compensation] work program currently in place, coupled with an examination of the results of the [current] armed conflict,” he says. “It’s pretty much anybody’s guess,” says Kerrigan’s wife, Sylvia, who also worked for the UNCC. The Kerrigans and James Loftis, a partner in Vinson & Elkins and another former UNCC lawyer, talked about their work on the commission at a luncheon March 18 sponsored by the litigation section of the Houston Bar Association. All three say it was a wonderful chance to do important international work and to live abroad. “It was a fantastic opportunity to meet the key players in the international arbitration community and develop strong networks in other countries [and] get a good solid grounding in a lot of different legal traditions,” says Loftis, who led the team that researched the single largest award, $15.9 billion to Kuwait Petroleum Co. for oil production and sales losses. IN THE PIPELINE Loftis was an associate with V&E in 1997 when he heard about the jobs with the UNCC. He was intrigued, so he applied, and flew to Geneva in April 1998 to interview. Loftis didn’t hear more from the U.N. until five months later, when he got a call offering him a job that would start immediately. By November, Loftis was on the job in Geneva, working as the leader of the team hearing claims from oil and gas and construction companies. He says he heard more than 40 claims in the three years he worked for the commission. It was a trip to Europe in 1999 that led to the Kerrigans’ decision to seek work with the commission. Matt Kerrigan says he and Sylvia went to dinner with Loftis, a friend of Sylvia’s from the University of Texas School of Law, and some of Loftis’ UNCC co-workers one evening. After hearing about what the lawyers did at the UNCC, Kerrigan says he and Sylvia decided to apply for positions, too. Sylvia Kerrigan, an assistant general counsel for litigation and environmental law at Marathon Oil Co. in Houston, worked at the UNCC during 2000 and 2001. She succeeded Loftis, now co-chair of V&E’s international dispute resolution practice group, as team leader for the Energy Sector Panel of the commission. Matt Kerrigan worked on a different team and stayed on until March 2002 because he needed to finish work on a group of claims filed by wealthy Kuwaitis who had valuable rugs, tapestries and art taken from their homes or damaged during the Kuwait invasion. Matt Kerrigan says the teams of lawyers at the UNCC would work with a panel of the UNCC in evaluating the claims. First, they would decide if the claims fit the criteria established by the U.N. Security Council when setting up the UNCC in 1991, and later the panel would put a value on the claim. “The panel is like an arbitration panel,” Sylvia Kerrigan says. The UNCC presents its decisions to the U.N. Governing Council, which has authority to approve the claims and the payments. (The 15 countries that are members of the Governing Council are the same countries on the Security Council.) Since the UNCC started approving claims in 1994, nearly 2.6 million claims have been processed, and 1.5 million of them were approved. The awards total $43.7 billion, but only $16.7 billion of the money has been paid so far, according to UNCC records. Iraq contributes 25 percent of the money it raises through the U.N. oil-for-food program to the compensation fund. That oil-for-food program, part of a procedure to gradually lift prior trade embargo sanctions, allows Iraq to use money from the sale of oil to pay for humanitarian goods. Loftis says separate teams at the UNCC worked on six types of claims: evacuation claims; personal-injury and death claims; individual claims of less than $100,000 in value; individual claims of more than $100,000 in value; claims from corporations; and claims from governments. When the commission was its busiest, 17 teams were at work, Loftis says. The claims included some filed by individuals who were injured during the 1990 invasion, some by energy companies from Kuwait and other countries including the United States, and others by importers who lost shipments of goods because of the invasion. Several U.S. companies, including Halliburton and Saudi Arabia Texaco, a subsidiary of Texaco, received awards, Sylvia Kerrigan says. In some cases, claims that seemed as if they should qualify were rejected because they were not directly related to Iraq’s invasion of Kuwait, Matt Kerrigan says, such as a claim filed by Turkey for losses when the country turned off a major oil pipeline into Iraq from 1990 to 1996. About 50,000 claims are still in the pipeline, according to the UNCC. But the new war could jeopardize the speedy resolution of those claims or produce a new batch of claims. Matt Kerrigan says the U.N. Security Council could decide to hold Iraq legally responsible for damages inflicted on its neighbors or businesses during the new war. “It’s also possible that the division within the council, particularly the willingness to veto expressed by France and Russia . . . may suggest that this Security Council may be quite reluctant to impose new and significant obligations to pay new damage claims unless Iraq takes some kind of step in this current conflict that would change that point of view,” he says. For example, he says, if Iraq uses chemical or biological weapons against the United States and its allies, or those weapons are found in the country, France and Russia could change their stance on whether to support the United States and its allies. Loftis says the pool of claimants in a new war would be different than the 1990-1991 conflict, when hundreds of thousands of people were displaced. Also, he points out, the Security Council never dealt with Iraq’s pre-invasion public debt in 1990, which totals billions of dollars Iraq owes to countries including France, Russia, Saudi Arabia, Kuwait and Japan. “I wouldn’t be surprised to see that re-urged now,” he says, adding that forcing Iraq, under a new government, to repay that debt would create massive overhead. ON THE ROAD Sylvia Kerrigan says she took a leave of absence from Marathon to work for the UNCC; Loftis also took a leave from V&E and rejoined as a partner. Kerrigan says the lawyers at his then-five-lawyer firm were supportive and “told me they would basically keep the light on in my room.” The pay at the UNCC was about $75,000 to $85,000 a year, a pay cut for all three of the Texas lawyers. But Matt Kerrigan says their salaries were essentially tax free, and the cost of living in France near Geneva, where he lived with his wife in 2000 and 2001, is in some ways less than in Houston. Loftis says he lived in Geneva, but spent about a third of his time on the road, traveling to many countries — including Kuwait, Saudi Arabia, Iran, Japan, Russia, France, the United Kingdom, Canada, Bahrain and the United Arab Emirates — while evaluating claims. Sylvia Kerrigan had perhaps the more difficult job when traveling to the Middle East. In Iran, she wore a traditional Arab garment, a chador, which covered her from head to toe with only her face showing. Kerrigan says in Kuwait she wore business suits, but with long jackets that covered her thighs so she wouldn’t offend anyone. “I would look like an oddly dressed Western person in Kuwait because of the length of the coat,” she says. The Kerrigans and Loftis aren’t the only Texas lawyers who have worked for the UNCC. Another is Michael Mucchetti, who is an aide to U.S. Rep. Lloyd Doggett, D-Austin, in Washington, D.C. Mucchetti did not return a telephone call seeking comment before presstime on March 20. Sylvia Kerrigan’s successor as a team leader is a retired in-house lawyer from Marathon, Larry C. Wiese. Matt Kerrigan, who does commercial litigation and personal-injury defense, says his experience in Geneva hasn’t translated directly into work. But he says the experience gave him a different perspective on dispute resolution. Loftis, who does international arbitration, says he has picked up some work since his return to V&E in 2000 because of his time at the UNCC.

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