Disaster lawyer on options to compensation litigation


Kenneth Feinberg, who is overseeing the payment of compensation for the BP oil-spill in the Gulf of Mexico, tells CAROL COULTERthat the tort system cannot be replicated everywhere

ALTERNATIVES TO litigation do not come much bigger than compensation for the massive BP oil-spill or for the victims of the 9/11 attacks on New York. American lawyer Kenneth Feinberg was given the task of dealing with both of them.

He was also asked by President Barack Obama to examine the issue of executive pay in seven major financial institutions which benefited from taxpayer support in the wake of the financial collapse.

He examined their pay and bonus schemes using both their own data and independent data, and determined what appropriate amounts would be.

“In determining pay, we followed a fairly open process, which was laid down by statute,” he tells The Irish Times. “It paid to keep the companies competitive, avoid excessive risk-taking and promote long-term performance.

“None of the companies was happy with what I recommended,” he says, “but they knew the only way they could come out from jurisdiction was to repay the taxpayer.” Three have done so, while four remain subject to the jurisdiction of the treasury department on the issue of executive remuneration.

The compensation paid to executives in huge multinational companies is many miles away from that paid to the victims of such companies, or of state actions, but that is where his career in that area began.

In 1985, he was asked by a federal judge of adjudicate on the compensation of Vietnam veterans who had suffered from exposure to Agent Orange, the toxic chemical widely used by the US army in that country during the war. He supervised the payout of $250 million.

This was followed by requests from other federal district judges to help resolve several difficult product liability lawsuits, including those involving victims of asbestos and the Dalkon Shield, a birth control device that injured more than 200,000 women.

He was then asked by former president George Bush jnr to oversee the settling of law suits against the government taken by victims and relatives of those killed in 9/11.

In 2009, Obama gave him the task of dealing with the $20 billion compensation package offered by BP in the wake of the oil spill. “In 13 months I received one million claims from all 50 states and 37 foreign countries,” he says. “When BP said it was putting up $20 billion, it engendered a lot of very creative claims.”

So far $5.5 million has been paid out to about 250,000 individuals and businesses, he adds.

Was there an element of compulsion in accepting the compensation, as people have to waive their right to sue when the full extent of the damage may not yet be known?

“No one is required to accept a final settlement,” he says. “If anyone feels the future is uncertain, they can opt for an interim payment and keep coming back until they are comfortable about the future; 25,000 people took that option.”

Despite the success of these major projects, Feinberg does not see them being replicated elsewhere and does not advocate this as a way of settling most compensation claims.

“In America, despite its limitations, the tort system works very well. These were events of unprecedented magnitude. Otherwise I very rarely see a desire to create a parallel system for compensating victims.

“There are problems [with these big compensation schemes]. Why these people? Bad things happen to good people all the time. It raises questions about a two-tiered system of justice.

“When you delegate one person to decide, you give them a huge amount of power without any checks and balances. They are outside the system of juries, appeals etc.”

On Thursday week, October 13th, Kenneth Feinberg will talk with university students at Foster Place, Temple Bar, at 6.30pm. Those with a valid student ID will be admitted on a first come, first- served basis. This is a free event.

On October 14th he will give an address at a luncheon at the Westbury Hotel, Dublin 2, sponsored by Cross Atlantic Capital Partners and Arthur Cox for the US-Ireland Alliance. A limited number of tickets may be purchased.

Those interested in attending should e-mail vargo@us-irelandalliance.org