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Mediator Kenneth Feinberg Speaks on Differences, Common Denominators of Compensation Funds

Mediator Kenneth Feinberg Speaks on Differences, Common Denominators of Compensation Funds

By Gabriel McIntosh

There are two common denominators to every compensation fund following a major disaster, mediator Kenneth Feinberg told participants of the ABA Alternative Dispute Resolution Forum at the Tort Trial and Insurance Practice Section and Judicial Division Joint Spring Meeting and CLE Forum.

“Do not underestimate the charitable impulse of the American people — it’s fabulous,” Feinberg said. “I don’t think there’s a nation on earth with that degree of charitable giving.

“The other common denominator is the emotion you have to confront. You’re better off with a divinity degree or a psychology degree. Brace yourself for a very emotional response. The survivors want to validate a loved one.” Feinberg added that understanding human nature was 95 percent of the job of a claims fund administrator.

Feinberg was special master of the U.S. government’s September 11th Victim Compensation Fund, and administered funds for victims of the 2010 BP Gulf Coast oil spill and the mass shootings at Virginia Tech University and in Aurora, Colo. He also mediated the suit between Vietnam veterans and the manufacturers of Agent Orange. “None of these programs would have succeeded without the organized bar,” said Feinberg, a former vice chair of the ABA Committee on Alternative Dispute Resolution.

Within days of the Boston Marathon bombing, Gov. Deval Patrick and Boston Mayor Thomas Menino named Feinberg to design and administer One Fund Boston, an account that gathers and holds donations for the bombing victims. Speaking to the forum assembled in Washington, D.C., Feinberg said that One Fund Boston now had more than $20 million (from 50,000 donations worldwide) to distribute to the families of the four killed (including the slain MIT police officer) and 170 injured in the bombing and its aftermath. Victims will be paid before the Fourth of July holiday.

“In a couple of weeks, we’re going to hold town hall meetings in Boston,” Feinberg said. “Let’s work it out. Let’s hear from everybody,” he said, referring to the two meetings he has called for the week of May 5 to discuss how best to divide the funds.

Eleven days after September 11, 2001, Feinberg assumed control of the first 9/11 fund, an unprecedented account established by Congress. The fund was designated to compensate families who lost a loved one on 9/11 and survivors who were injured in the attacks. Those who participated in the fund were required to waive their right to sue the airlines as well as other potentially liable entities.

Feinberg stressed that this requirement set the 9/11 fund and the $20 billion BP oil spill fund apart from other victim compensation funds. “That is a big difference, conceptually and practically. Join in or litigate, but not both,” he said. Feinberg also noted the difference between government victim funds and those from private donations.

Over the three years after 9/11, Feinberg spent much of his time, all pro bono, in more than 900 meetings with the victims and their families, trying to convince them that the program was compassionate, and calculating awards for claims. Eventually, 97 percent of eligible families participated in the fund. (Feinberg measures his success in mass claims situations by the proportion of claimants who participate in the fund and how few engage in separate litigation.)

Feinberg said to the Alternative Dispute Resolution Forum participants: “In all of these cases, there is a role for you to play. Keep your eyes and ears open. In these claim situations, we use mediators all the time … In the BP case, the claims that were settled the easiest were the ones with lawyers at the table.”

A questioner referred to Feinberg’s earlier comment that the One Boston Fund would have “no overhead, all volunteers, all pro bono,” and offered him office space at her Boston firm. “You’re the 201st person to offer, and God bless you, but I don’t think we’ll need it,” Feinberg said.

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