New York: World Trade Center rescue workers reach $712.5 million settlement with city

Attorneys for more than 10,000 workers who were injured or fell ill during rescue and recovery operations at the World Trade Center have reached a settlement with the City of New York and its captive insurance company.

Numerous studies have found that firefighters, police and debris removal workers stationed at ground zero in the weeks and months after the 9/11 terrorist attacks have developed debilitating respiratory conditions, cancers and other maladies. After a lengthy legal process, lawyers representing the plaintiffs thought they had reached a settlement earlier this year with the city and its WTC Captive Insurance Co., which was created with a $1 billion grant from the Federal Emergency Management Agency. However, a federal judge who oversaw the case rejected the proposal on grounds that the terms of the deal were confusing and that the attorney's fees were too high.

The amended settlement reduced attorney's fees by more than $50 million and kicked in an additional $50 million to $55 million from the captive insurer, providing workers with as much as $712.5 million in total compensation. Plaintiffs have until Sept. 30 to review the settlement with their attorneys and decide whether to participate. For the deal to proceed, 95 percent of the plaintiffs must opt-in.

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A critical component of the amended agreement will allow plaintiffs who are receiving workers' compensation for their injuries to continue getting those benefits without deductions if they participate in the settlement. Generally, payments from workers' comp awards are repaid from the tort settlement proceeds by exercising a "lien" on the settlement money. However, the deal calls for the WTC Captive Insurance Co. to waive those liens. Attorneys are urging other comp insurers who hold liens to do the same.

Read more at the WorkersComp Forum homepage.

August 9, 2010

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