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NYC reaches $712.5 million settlement with World Trade Center cleanup workers

By Drew Singer

[JURIST] New York City reached a settlement [overview, PDF; materials] Thursday with the 10,000 rescue and cleanup workers who became sick or injured from responding to the 9/11 attacks [JURIST news archive]. The agreement follows two failed settlement attempts between the parties. The city's insurer, WTC Captive Insurance Company [official website], has agreed to pay the plaintiffs $712.5 million, up from its previous offers of $575 million and $657.5 million. Also, the plaintiffs' lawyers will reduce their legal fees from 33.33 percent to a maximum of 25 percent, giving their clients an extra $50 million. The most severe injuries, most of which are asthma-related, could garner more than $1 million in compensation for a client. WTC Captive President and CEO Christine LaSala said she was pleased with the settlement [press release]:

This settlement gives the plaintiffs immediate, fair and reasonable compensation, certainty and closure after years of protracted and costly litigation that will continue without this agreement. This settlement establishes objective criteria, based upon accepted medical standards, to assess the type and severity of each illness alleged in order to achieve a fair value for each claim.

Judge Alvin Hellerstein of the US District Court for the Southern District of New York [official website] signed off on the legal settlement and immediately urged plaintiffs to take the deal. The agreement allows the workers 90 days to decide to whether to opt in to the settlement [AP report]. In order for the settlement to be effective, it must be accepted by 95 percent of the 10,000 workers.

Hellerstein rejected a proposed settlement in March [JURIST report], citing an unfairness of claim amounts and the over-complicated process to determine compensation. Hellerstein also said that attorney's fees should be limited and paid by the WTC Captive Insurance Company, rather than by the claimants. WTC Captive is a nonprofit company created by Public Law 108-7 [text, PDF] with $1 billion in FEMA [official website] funding to compensate injured workers involved in the Ground Zero rescue and cleanup efforts. In 2007, the City of New York agreed to enter into settlement negotiations over a federal class action lawsuit filed on behalf of more than 9,000 emergency and cleanup workers who may have inhaled toxic dust at WTC site, which Hellerstein allowed [JURIST reports] to proceed. The plaintiffs claim that they were not properly equipped or trained to perform their tasks.

Full post as published by JURIST - The Paper Chase on June 10, 2010 (boomark / email).