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 “Who Gets What” - Setting Compensation After Tragedy

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 “Who Gets What” - Setting Compensation After Tragedy

February 23, 2022

Wednesday 1:00 p.m.-2:00 p.m. ET

This installment of Wednesdays with Woodward® featured a rare interview with Kenneth R. Feinberg, a preeminent mediation expert with decades of experience overseeing high-profile victims’ compensation funds including for 9/11, the BP Deepwater Horizon oil spill, and the Boston Marathon. Feinberg, subject of the Netflix movie, Worth, and author of Who Gets What: Fair Compensation after Tragedy and Financial Upheaval, discussed the personal and professional challenges of taking on these cases and the difficult process of deciding compensation after the tragic loss of human life.

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Summary

What did we learn? Here are the top takeaways from “Who Gets What” – Setting Compensation After Tragedy.

The importance of listening. “The most difficult part of administering the 9/11 Fund was not calculating the value of lives, but was from the emotion,” said Ken Feinberg, who volunteered and was designated as Special Master of the 9/11 Victim Compensation Fund just days after the attack. Conducting 900 individual meetings with victims, he noted that it’s never about the money. “They come to talk about validating the memory of a lost loved one. They come to vent about life’s unfairness,” he observed. “When you sit down one on one, you never get over it.” While it can be the most difficult part of the job, Feinberg believes offering victims a safe space to process the emotionally raw aftermath of a tragedy is why most accept compensation as a gift and rarely litigate for more money.

Managing expectations and building trust is critical. Looking to the insurance industry as an example, Feinberg’s team designed their compensation programs to maximize empathy, speed, efficiency and certainty. “Come into the program and we’ll evaluate your claim with simplicity. Within 60 days, you know how much you’re going to receive. There are no curveballs or hidden agendas,” he said. That speed and transparency is crucial to building trust with the claimants, Feinberg noted.

Determining eligibility and compensation is a delicate balancing act. According to Feinberg, there were no caps on available compensation for the 9/11 and BP Deepwater Horizon oil spill funds. “When you’ve got enough money, you can broaden the eligibility to include mental anguish or people who otherwise would be far removed from the scene,” he said. Unfortunately, unlimited funding is not the norm. “You have to make some tough calls on how you define eligibility and how much money will be available to claimants,” noted Feinberg. “You can’t make everyone eligible if you don’t have sufficient compensation available to disseminate.”

The 9/11 Victim Compensation Fund: right for the time, wrong for the future. As a “one-off response” to a unique, unprecedented tragedy in American history, Fienberg believes that the 9/11 fund was “the right thing to do at the time … a sound public policy.” He cautioned, however: “Don’t ever do it again – not that way.” Recalling “great difficulty” fielding grievances from victims of equally tragic events who did not receive compensation for their losses, he called programs like the 9/11 and BP funds “aberrations … exceptions to the rule.” Feinberg’s hope is for future Congressional responses to “treat all victims the same, without requiring calculations about economic loss and pain and suffering.”

Insurance is still the best way to minimize risk. “Life is a roll of the dice, no matter what,” said Feinberg. “Bad things happen to good people every day, and there aren’t many industries better able to provide predictive skill than the insurance industry.” Feinberg, who is a trustee of the RAND Corporation, noted they are working with insurers to better understand predictive capacity. “They are the experts,” he offered. “We have a lot to learn from the insurance industry about predicting and protecting against risk.”

To mediate or litigate, that is the question. While it has become an important part of the dispute resolution process, Feinberg believes mediation is a “good alternative,” but will never replace the adversarial nature of the American tort system. “The approach the nation has taken from the time it was founded is: You choose your lawyer; I’ll choose mine and the jury will decide.” Social inflation and “nuclear” verdicts have become a major threat “not only for the defendant company and its insurers, but in terms of expectation among the body politic,” he added. “I think the American legal system, if it has one drawback, is its inability to adequately and efficiently deal with mass tort litigation.”

Managing the emotional toll. Helping victims process grief can take its toll on the mental and emotional well-being of Claim professionals. After listening to the “horrors of civilization” through the lens of claimants each day, Feinberg found he needed “to take a break, go outside, walk around the block and see happy little children playing –buy an ice-cream cone.” He recommends making time to “escape” in diversions that bring calm, joy and hope, which, for Feinberg, include taking in the symphony, opera and chamber music.

Presented by the Travelers Institute, the American Property Casualty Insurance Association, the MetroHartford Alliance, the RAND Corporation and the Risk and Uncertainty Management Center at the University of South Carolina’s Darla Moore School of Business.

Speaker

Kenneth R. Feinberg
Kenneth R. Feinberg
Special Master of the 9/11 Victim Compensation Fund; Trustee, RAND Corporation

Host

Joan Woodward headshot
Joan Woodward
President, Travelers Institute; Executive Vice President, Public Policy, Travelers


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