A recommendation by a panel to dissolve the captive established to protect New York City and its contractors from lawsuits arising out of the cleanup at the World Trade Center site following the Sept. 11 terrorist attacks is a good idea because the facility is tied up in litigation and isn't working out as planned, the captive's administrators contend.
New York Mayor Michael R. Bloomberg last month announced acceptance of a comprehensive set of recommendations that would seek to ensure "a sustained, high-quality public health response for individuals experiencing 9/11-related health conditions."
The recommendations were made by the World Trade Center Health Panel, a group the mayor appointed in September 2006 to assess the sufficiency of state and federal resources to address ongoing health needs and to ensure maximum coordination between city agencies.
The WTC Captive Insurance Company acknowledged in a statement that there is a "better way to resolve the claims of those involved in the post-9/11 rescue, recovery and debris removal process than the tort system and the current costly and time-consuming litigation."
"As we have said on many occasions over the past year, it is within the Congressional prerogative to create a new, or reopen the old, Victims Compensation Fund, which would make funds available on an appropriate and equitable basis to those involved in the post-9/11 rescue, recovery and debris removal process," the statement added.
A representative for the WTC facility told National Underwriter the captive's administrators "agree with Mayor Bloomberg that if the federal government could form a new Victims Compensation Fund, and if the legislation provided the city and its insureds with immunity from civil liability both now and going forward, so the city and the contractors did not face the specter of untold financial losses–and in the case of the contractors, financial ruin–we would be happy to see that [Federal Emergency Management Agency] grant allocated to a Victims Compensation Fund."
He explained that "the media has attacked the captive for not being a fund, but it is not a fund. It's a captive insurance company whose only duty is to protect the city and the contractors. They are insureds of the captive–its only clients."
What this means, he said, is that before the captive can write checks to settle litigation, it needs "to have facts and circumstances fully developed that can provide a basis for a settlement."
Up until now, he noted, "only one of the more than 8,000 suits filed has met that standard. It's frustrating for everyone. No one's happy, including the captive that has run up a legal bill of more than $30 million in defending these suits."
Under the present circumstances, he said, "the captive's insurance policy, issued to the city and its contractors, and the $1 billion granted to the captive by FEMA are the only protection that the city and those contractors have against an unlimited number of plaintiffs suing for an unlimited number of dollars."
The 15 recommendations offered by the report include full funding of treatment centers, a new medical working group, a WTC health coordinator and reopening the Victims Compensation Fund.
At the same time the VCF is reopened, according to the report, Congress should eliminate the liability of the city and its contractors for claims arising out of the cleanup at the World Trade Center. Since the WTC Captive Insurance Company would no longer be needed, Congress could also liquidate the insurer and put its $1 billion into the reopened VCF.
The recommendations also include requesting $150 million per year in federal funds for essential health and mental health programs, and establishing new systems to keep policymakers, physicians and those who need assistance aware of emerging issues.
The report estimates that the health impacts of 9/11 cost the health care system $393 million per year.
"As the mayor pointed out, the legislation forming such a fund would need both to provide money to resolve the legitimate claims of those who qualify as victims under the terms of the fund and to protect the WTC Captive's insureds–the city and its contractors–by eliminating their liability from any current or future legal civil claims relating to their post-9/11 work," the captive's representative said.
The statement concluded that if such legislation is enacted "and provides an alternative to litigation, the WTC Captive Insurance Company would be pleased to see the $1 billion FEMA grant with which it was funded more than two years ago reallocated to the reinstituted Post 9/11 Victims Compensation Fund."
The committee's proposal recommended using "federal money to compensate claims without the need to prove fault on the part of the city, its contractors or anyone else, [which] would eliminate the delay and expense inherent in litigation."
The reopened Victims Compensation Fund would be used for individuals who "couldn't seek its help before the fund's closure in December 2003," the report said.
The full report of the panel, including the 15 recommendations, is available on the city Web site, www.nyc.gov.
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