Administering justice after a disaster

“Every once in a while in American life, there is a catastrophe,” said Kenneth R. Feinberg. “And the tragedy so triggers an emotional response that policymakers decide there must be a better way to compensate innocent victims than the conventional tort system.”

That better way has been the special compensation fund, and Feinberg – who gave the 2014 Gerald S. Lippes Lecture – has served in those trenches. Most notably he was special master of the federal September 11th Victim Compensation Fund; in that capacity he reached out to all who qualified to file a claim, evaluated applications, determined appropriate compensation and distributed awards. He also administered the funds to compensate victims of the 2007 shootings at Virginia Tech, the Deepwater Horizon oil spill, the Boston Marathon bombing and other high-profile mass disasters and mass torts.

Feinberg was in Buffalo on Oct. 6 to deliver the Lippes Lecture, sponsored by SUNY Buffalo Law School and the UB School of Management. The lecture, which focuses on current issues in business and law, is funded by Gerald S. Lippes ’64, founding and senior partner of the Buffalo law firm Lippes Mathias Wexler Friedman.

Feinberg’s address at the downtown Hyatt Regency Hotel, titled “Settlements and Compensation Funds,” showed how deeply complex and emotional is the process of applying money to soothe the human wounds of mass tragedies.

First, he noted, “These programs are exceedingly rare. I consider them precedents for nothing. They’re interesting to analyze, they’re interesting to study, but I do not think they’re going to replace the American tort system. They are isolated examples of a policymaker response to an inadequate legal system that delays compensation, promotes uncertainty and guarantees the innocent victim nothing.”

He also distinguished between compensation funded by the government or the responsible companies – those for 9/11, the BP oil spill and the General Motors faulty ignition switch case – and programs established to distribute an outpouring of gifts from private donors. It has always baffled him, he said, why victims and families that receive money from the latter programs typically don’t then turn around and sue, say, the university where a shooting occurred. Nothing in the compensation agreement, he said, precludes a lawsuit; yet nearly all victims take the gift money and leave it at that.

Special compensation funds, Feinberg said, aggregate claims from a mass-injury incident and produce a “prompt, consistent, certain result.” It’s not a perfect system, he acknowledged, but he challenged critics to suggest a better one.

Another concern, he said: “When you talk about efficiency, speed, aggregation, what about due process? How do we know that each individual aggregated victim will be treated fairly? How do we deal with mass litigation and at the same time remember that each victim is entitled to his day in court and ought to be treated fairly and equitably?  You can’t try cases one at a time, but you can’t treat people like they’re a number.”

One solution that he has developed is to give people a chance to speak their mind. “In my cases,” Feinberg said, “anyone who wants an opportunity to be heard, we will invite you in for a private hearing, under oath, with a reporter. That is the most difficult, challenging and harrowing part of what I do. That’s the horror and the tragedy and the chilling aspect of this. Because you do become, to a certain extent, Solomon.

“In 9/11, I conducted 950 separate hearings with victims and their families. I bet there weren’t five people who came to see me to talk about money. They came instead for two reasons. One was to vent about life’s unfairness. The other was, people come to see you to validate the memory of a lost loved one. My office in 9/11 was filled with memorabilia: videos, audiotapes, ribbons, medals, diplomas, certificates of good conduct, graduation certificates. … Do not underestimate the importance of giving people the opportunity to be heard. If you don’t do this, people feel like they’re being railroaded. You’d better be a good listener, and you’d better be careful what you say, because there’s nothing you say that can temper the emotion.”

At times his law degree seemed of little use, Feinberg said, and he would have done better with a divinity degree or one in psychology.

At heart, he said, the challenge comes down to this: “How do you tailor an aggregative solution, a mass solution, to individual treatment of a claim?”

Feinberg’s lecture was additionally sponsored by the Coalition for Litigation Justice. He was introduced by Associate Professor S. Todd Brown, director of the Center for the Study of Business Transactions, who also moderated a question-and-answer session.