A Look Back at Our Victims Compensation Fund Experience

If we're really lucky, when we look back upon our professional careers, we can point with pride and satisfaction to a job, event or episode wherein we worked especially hard, accomplished a difficult task and really made a positive difference in people's lives.

JONAS & WELSCH, P.C. is proud to have participated in the monumental task of carrying out Congress' wishes to compensate, if only monetarily, the families of the victims from the September 11th attacks.

Shortly following that tragic day, Congress passed legislation which provided an alternative to litigation for the families of deceased 9/11 victims, as well as those injured at the sites of the attacks. Title IV � Victim Compensation is part of the Air Transportation Safety and System Stabilization Act. This law created the "Special Master," Kenneth Feinberg, who worked within the authority granted by the Attorney General.

We had the extreme good fortune to work directly with Mr. Feinberg as the detailed mechanics of award calculations were evolving. Since, at that point in time, our client was the law firm representing a significant portion of the fallen and injured New York City firefighters, we had the opportunity to provide input to the Special Master in the formative stages of the program.

We worked for over a year on individual award applications and attended dozens of hearings with either Mr. Feinberg or one of his hearing officers. We developed somewhat of a reputation for our efforts and soon were representing other law firms who had taken on this work.

So, what have we learned? Besides having had a privileged view of the inner workings of a unique federal government operation and working directly with the Special Master, we came away with professional and personal experiences that extend well beyond The Victims Compensation program.

I. AN ACADEMIC LESSON:

A MAJOR STEP FORWARD IN THE EVOLUTION OF CALCULATING THE VALUE OF LOST HOUSEHOLD SERVICES

Although not originally contemplated in the regulations governing the loss calculations, Mr. Feinberg was receptive to the notion that the well-recognized theory concerning the value of lost household services (i.e. services provided around the house; cooking, shopping, child care, etc., have economic value even if the provider of those services is not actually paid) could be applied to VCF claims...with one major proviso; no out-of-the-can, one-size-fits-all approach.

It had been common in wrongful death and personal injury cases to estimate the value of these services by using the national average cost for all variety of these services without acknowledgement of case-specific circumstances. Mr. Feinberg insisted that the facts of each claim be reflected in the calculation.

We reexamined the accepted data available and developed an approach that factored in the specific number of hours lost by specific service provided, adjusted for regional differences in cost and for inflation specific to the type service. This became a routine part of our calculations, which were accepted and complimented many times by the Special Master.

Basically, this is a better approach than had been used in the past. "Necessity is the mother of invention." This methodology is now imbedded in the Jonas & Welsch wrongful death and personal injury calculations.

II. LESSONS IN HUMAN NATURE

SOMETIMES THE PROCESS IS MORE IMPORTANT THAN THE OUTCOME � PERCEPTION COUNTS!

Based strictly on our personal observations, we believe a large proportion of claimants were appreciative of the process; their government was listening and sympathetic. The dollar amount, while important, seemed secondary.

Mr. Feinberg over time created a process that incorporated as many positive, politically correct perceptions as possible. He mightily believed in the program and tirelessly encouraged the victims' family to participate. He even visited non-filers at home to try to convince them! Ultimately, 97% of qualifying families filed claims. He held hearings seven days a week; he conducted hearings in California to accommodate West Coast families; he insisted his work and that of his firm be on a pro bono basis to preclude any perception of "profiteering." (NOTE: The pro bono work was valued in excess of $7 million.)

On a pragmatic basis, Mr. Feinberg continually resolved issues in favor of the families: for example, the calculation of worklife expectancy would employ the economic tables for MALES, regardless of the gender of the victim. The FEMALE tables, historically, contemplate an absence from the workforce during the child bearing and rearing years and, therefore, the time to retirement is less than a man's. But, the tables were constructed with data amassed at a time before women's actual worklife more resembled a man's, with only a minor interruption for child-bearing. Assumptions concerning tax rates, wage growth rates, charitable donations received, social security payments received by the surviving spouse, and many others were all resolved in favor of the claimants.

We have done no work to quantify how much, in dollars, these decisions impacted the final numbers, but we're certain the claimants' misgivings about a "we're from the government and we're here to help" approach were allayed by the perception of fairness and propriety.

III. PERSONAL LESSONS

OUR BUSINESS IS NOT MERELY NUMBERS

Don is an economist and Bruce is an accountant. Our stock in trade is number crunching and interpretation. This experience underlined the notion that what we do affects real people, not just balances in a ledger or trends or forecasts. Although we spent hundreds of hours grinding through applications and preparing and executing complex interwoven spreadsheets, we also attended dozens of hearings. Real people told real stories of their loved ones and the horrendous loss they have suffered. Picture endless eulogies with grieving widows and bewildered children and empty parents and angry siblings.

Kenneth Feinberg was the right person to manage and rule this massive effort; we were merely players. But, we saw, on a one-on-one basis, how our work fit into the giant jigsaw puzzle of award calculations. It was humbling. The lesson learned was that although there can be a mechanical, detached analysis, what we do affects people, plaintiffs, defendants, claimants, respondents.

The direct VCF claim process is over. The effects continue to ripple through our professional lives and our personal outlook on the world. We believe we are better for the experience.

Summary statistics for Jonas & Welsch P.C. and the VCF:

Number of families of DECEASED represented: 107
Number of INJURED calculations prepared: 310

Number of DECEASED in uniform: 95
Number of DECEASED civilians: 12

Number of LAW FIRMS with whom we worked: 20

Dollars* requested on behalf of DECEASED: approximately $200 million

*Although we do not habe the "Final Award" amounts for all the deceased applications, our award requests, for those for whom "Final Awards" are known, were usually within 10 percent of the final determination.