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Big disaster funds should remain rare tool, Feinberg says

April 08, 2015

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Compensation “czar” Kenneth Feinberg on April 7 told a Tulane Law audience about the families he encountered administering the 9/11 fund, and he examined the issues raised by unconventional responses to the legal side of mass disasters.

Photo by Ryan Rivet

Watch the video on YouTube 

Though he has doled out billions of dollars after catastrophes instead of having victims sue in court, attorney Kenneth Feinberg warns that huge compensation funds like those spawned by 9/11 and the BP oil spill are rare and should stay that way.

The unprecedented $7 billion September 11th Victim Compensation Fund created by Congress was “the right thing to do” for the country at the time, Feinberg told an audience at Tulane Law School April 7.

“It worked," he said. "Don’t ever do it again.”

Feinberg has been called the “master of disasters," having been tapped to administer funds large and small, including the 9/11 fund and later privately raised collections that assisted families after the Boston Marathon bombings and mass killings at Sandy Hook Elementary School in Connecticut, Virginia Tech and a movie theater in Aurora, Colorado.

Weaving stories about distraught 9/11 victims’ relatives in with law and policy issues, Feinberg suggested that a divinity or psychiatry degree might be more important to the work than a law degree.

“Brace yourself for what you’re going to hear,” he said. 

Using public money to compensate select victims quickly through a process that bypasses the court system raises profound questions, he said, because “bad things happen every day to people” and most don’t have special funds set up for them.    

Feinberg said another 9/11 fund is unlikely, and he doesn’t expect to see another response as large as BP’s pledge of $20 billion up front to pay hundreds of thousands of people whose lives were upended by the Deepwater Horizon explosion in April 2010.

During the two years he oversaw the Gulf Coast Claims Facility, Feinberg said, more than 1.2 million claims were reviewed, and $6.5 billion from BP was paid in 220,000 cases. Claims came in from all 50 states, but about two-thirds were rejected as ineligible or lacking proof, he said.

A former chief of staff to the late Sen. Edward M. Kennedy of Massachusetts, Feinberg founded his own firm, Feinberg Rozen, in 1992 and has mediated settlements in cases involving Agent Orange, the Dalkon shield and other mass tort claims.

These days, he heads the fund General Motors set up, under congressional pressure, to pay claims stemming from faulty ignition switches. As of April 6, 80 deaths and 148 injuries had been attributed to the problem, and more than 1,200 claims still are being reviewed.

But even as he does the work, Feinberg questions the wisdom of concentrating so much authority in one person. Though it provides efficiency, speed and certainty in resolving potential legal cases, he said, “that’s not good political science.”

 
   


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