September 11th Victim Compensation Fund
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The September 11th Victim Compensation Fund was created by an Act of Congress, the Air Transportation Safety and System Stabilization Act (49 USC 40101), shortly after 9/11 to compensate the victims of the attack (or their families) in exchange for their agreement not to sue the airline corporations involved. Kenneth Feinberg was appointed by Attorney General John Ashcroft to be Special Master of the fund. He worked for 33 months pro bono. He developed the regulations governing the administration of the fund and administered all aspects of the program.
Feinberg was responsible for making the decisions on how much each family of a victim would receive. Feinberg had to estimate how much each victim would have earned in a full lifetime. If a family accepted the offer, it was not possible to appeal. Families unhappy with the offer were able to appeal in a nonadversarial,Official Fund website (archived) informal hearing to present their case however they wanted. Feinberg personally presided over more than 900 of the 1,600 hearings. At the end of the process $7 billion was awarded to 97% of the families; the average payout was $1.8 million. A non-negotiable clause in the acceptance papers for the settlements was that the families were to never file suit against the airlines for any lack of security or otherwise unsafe procedures.
A stumbling block to settlements was the fact that many of the World Trade Center victims were highly compensated financial professionals. Families of these victims felt the compensation offers were too low, and, had a court considered their case on an individual basis, they would have been awarded much higher amounts. This concern had to be balanced against the time, complications, and risks of pursuing an individual case, and the real possibility that the airlines and their insurers could be bankrupted before being able to pay the claim.
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