|Ken Feinberg, master mediator and founder of Feinberg Rozen LLP, explains that there are no precedents in disaster relief. Presidents have called on him to handle claims arising from 9/11 to the BP oil spill.|
What do you do when unprecedented catastrophe strikes and the law is unclear on how to compensate victims? U.S. presidents typically turn to Ken Feinberg, a master mediator who has been the administrator of funds for everything from 9/11 to the BP oil spill.
During the Segal Lecture last October, Feinberg described his creative responses to some of America's most challenging disasters.
Feinberg told the overflow crowd that the U.S. legal system works well in most circumstances. But when he was named special master of the 9/11 Victim Compensation Fund by President Bush, and given responsibility for dispersing several billion dollars, he had to deal with thousands of claims, some of which required him to make judgment calls.
"In 9/11, we had to make on-the-spot legal judgments about issues that bedeviled us — that were out of the box," said Feinberg. Feinberg said death claims were easier to process than physical injury claims, which presented many challenges. The chaos on 9/11, he said, made it difficult to determine whether a claimant's injury was directly related to the terrorist attack.
In one claim, Feinberg said, a man on E. 96th Street, three miles from the attacks, sought damages for falling down a flight of stairs after witnessing the planes crash into the Twin Towers.
In another instance, a woman in Jersey City, four miles away, claimed she suffered a debilitating lung injury after breathing smoke from the post-crash plume.
To reduce the amount of fraudulent and unfounded claims, Feinberg said he drew a boundary between West Street, South Ferry, Lower Broadway and Canal Street. He then determined that only claims within the vicinity of that square would be deemed valid.
"Somebody might have dealt with it differently," Feinberg said. "It was all taxpayer money. We decided that we had to interpret a statute that talked about immediate vicinity. That's how we did it."
Feinberg said he faced similar challenges when President Obama appointed him administrator of the $20 billion BP Deepwater Horizon Oil Spill Fund. Once again, Feinberg said he suggested creating geographic perimeters for claims only to have his "head handed to (him)." With those limits off the table, claims poured in from around the country, recounted Feinberg.
"But you still have to prove your damage," Feinberg told students. "You have to show me that a golf course 100 miles from the beach suffered a loss as a result of the spill, not the recession."
As of March, Feinberg had paid more than 200,000 claims for a total of $3.7 billion.
He said more than 40,000 of those claims were under review for inadequate or insufficient documentation. However, Feinberg warned the audience about drawing conclusions from his examples. Twenty-five years on the front lines of disaster relief, he said, has taught him that there is no such thing as precedents in his work, only case-by-case evaluations based on unique circumstances.