Uncertainty over compensation for Boston Marathon victims

Two explosions went off near the finish line of the 117th Boston Marathon on April 15, 2013. Credit: Getty Images
Two explosions went off near the finish line of the 117th Boston Marathon on Monday.
Credit: Getty Images

Victims of the Boston Marathon bombings will eventually win some kind of compensation, but it is far too early to know how much money there will be, whether private donors or insurers will provide most of it, and how long it might take to distribute.

Late on Tuesday, state and city officials said they had established One Fund Boston, designed as a central source of compensation for victims. By Wednesday, the fund was up to $7 million, its sponsors said, including donations from more than 8,500 people.

Kenneth Feinberg, the attorney who oversaw compensation funds for victims of the Sept. 11, 2001, attacks and the April 2007 Virginia Tech shootings, was named to administer One Fund.

What happens next will depend in part on whether individual victims choose to hire lawyers to press their own claims. Judging from previous catastrophes, experts say victims have an easier path if they settle with a central relief fund, rather than pursue lawsuits against governments, race sponsors or perpetrators.

A fund is “the easiest, the fairest and the quickest way to go,” said Marc Bern, a lawyer who represented thousands of workers at the World Trade Center site in litigation over illnesses related to the 9/11 attacks.

“The most important thing for the victims of these kinds of tragedies is a quick solution,” he said, even if that means surrendering the right to sue others for even more compensation later.

Monday’s attack killed three and wounded more than 170. Many of the survivors suffered amputations that will require prolonged medical treatment and rehabilitation.

The parameters of One Fund Boston are still unclear and may not be known for days or weeks. A spokesman for Goodwin Procter could not immediately comment on when victims or their families could start filing claims, and whether the fund would handle claims on a case-by-case basis or in groups.

Such questions will have to be answered before anyone can get paid, according to Kenneth Feinberg, the Washington attorney who administered funds set up after 9/11 and the 2007 Virginia Tech shootings.

“If you take the money, do you give up your right to litigate against the city of Boston or the marathon association? Who’s eligible?” said Feinberg, considered the world’s foremost expert on disaster compensation.

The 9/11 fund — a rare example of the federal government, rather than the private sector, taking the lead on disaster compensation — provided money for people with injuries provided they surrendered their rights to sue.

Money gets struck

In December’s Newtown school shooting in Connecticut, no central authority was appointed. That appears to have slowed the distribution of funds raised for victims and their families.

“These kinds of tragedies really generate an entirely different kind of charitable giving than is normal. It’s emotional, it’s chaotic, and people are driven to want to help in some way,” said William Rubenstein, commissioner of the Connecticut Department of Consumer Protection.

Disputes can arise even when there is a central authority. Victims from the 1995 Oklahoma City bombing, according to the NBC network, are still fighting over claims with the Oklahoma City Community Foundation, which oversees a relief fund. The fund has defended its distribution practices.

There are also fraud risks to consider. Massachusetts Attorney General Martha Coakley warned on Wednesday that within four hours of the bombing, more than 125 websites had been registered purportedly to collect money for victims.

Regardless of who is giving out the money, calculating how much each victim should receive promises to be a painstaking process. It will depend in part on whether the fund administrator decides to lump people together into categories.

The 9/11 fund considers each case individually, calculating economic loss (medical costs, lost earnings. etc.) plus noneconomic loss (pain and suffering) and then subtracting any other money earmarked for the victim. Payments have ranged from $10,000 to $1.5 million.

Some funds group victims by category and pay accordingly. The fund set up for victims of the 2012 Aurora theater shootings paid $220,000 to families of the dead and those who suffered brain damage or paralysis. Survivors who stayed in hospital longer than 20 days received $160,000. There were other lower brackets as well, depending on the length of hospitalization.

After some past disasters, such as Aurora, hospitals waived or limited bills for those who did not have private insurance. Boston-area hospitals are still addressing that question. Massachusetts General Hospital said on Wednesday that it would expect patients’ insurers to be billed first, though it would take all bills on a case-by-case basis.

Insurance may apply

In theory, victims also have the right to pursue litigation against the Boston Athletic Association (BAA), which has organized the 26.2-mile race since 1897, or the perpetrators, assuming authorities eventually arrest and convict them.

But it is far from clear whether either of those parties will have sufficient funds to pay off any claims, or how long it would take to reach a settlement.

Bob Murphy, global sports and events practice leader for insurance brokerage Marsh, said he had fielded more than 100 calls since Monday from clients and underwriters asking about potential claims related to the bombings.

“We’re talking about somebody injured or a fatality as a result of a terrorist event. Could liability come out of this? Absolutely,” he said. “Are most of these events covered for that? Yes.”

The BAA’s ability to pay any settlements likely will depend on its insurance coverage. It may have a specific policy to cover terrorism-related incidents or a special clause in its regular liability policy to cover such acts.

The BAA declined to comment on what type of policy it had.

“The organizers of larger events tend to be more risk-aware and do contemplate acts of terror as a possibility under the terms of the coverage as a matter of course,” said Ian Barnes, a member of the terrorism and political risk team at Cooper Gay, a British insurance broker.

Assuming the BAA has terror coverage, it probably will not kick in unless there is an official designation by U.S. Attorney General Eric Holder and Treasury Secretary Jack Lew that the bombing was an act of terrorism.

President Barack Obama on Tuesday called the bombings an “act of terror.” Under the federal government’s Terrorism Risk Insurance Program, the attorney general and treasury secretary must officially certify an event as an act of terrorism before that government program can be activated.

Even if activated, though, it would not start paying until claims have reached $100 million.

Follow Metro Boston on Twitter: @MetroBos



News
Entertainment
Sports
Lifestyle
Local

Apple says its systems not to blame for…

By Edwin Chan and Christina FarrSAN FRANCISCO (Reuters) - The week before a crucial launch of its new iPhone, Apple Inc said intimate photos of…

Local

Tallest residential building planned for lower Manhattan

A residential tower planned for lower Manhattan will soar 1,356 feet in the air -- just 12 feet shy of 1 World Trade Center. When…

Local

Bronx man commits suicide by decapitation

A Bronx man committed suicide Monday morning in the Hunts Point area of the Bronx by decapitating himself. According to the NYPD, the 51-year-old man…

Local

Top cops enroll in Twitter course at John…

NYPD officers are reportedly getting a lesson on the best way to use 140 characters or less. The New York Post reported Tuesday top officers…

Arts

Pop culture and prostitutes: New Toulouse-Lautrec exhibit at…

Henri Toulouse-Lautrec documented the cult of celebrity and the rise of pop entertainment in his prints, posters and lithographs — now on display at MoMA.

Arts

PHOTO: Extreme artist Eskil Ronningsbakken balances unicycle on…

Extreme artist’ Eskil Ronningsbakken balances on the edge of a cliff face at 4,600 feet – on a unicycle. The Norwegian travels across the globe, balancing over vertiginous ravines, tall…

Music

Hear two previously unreleased Adele songs

Missing some Adele in your life? Two previously unreleased songs from the singer have appeared online.

Music

Lincoln Center just made 'Lord of the Rings'…

Middle Earth already has sweeping vistas, a hero's journey and technology-revolutionizing special effects. But next April, the Lincoln Center will add another dimension to Peter Jackson's…

NFL

10 storylines to watch for the Giants this…

The Giants rebounded from an embarrassing 0-6 start last season, but not well enough to make the playoffs.

NFL

Michael Vick set to be weekly guest with…

Mike Francesa may need to backtrack from his harsh commentary of Michael Vick now that the Jets backup quarterback will be a weekly guest on his show.

NFL

Jets expect to make playoffs after sitting on…

The same pundits who predicted the Jets would be woeful a season ago are now eying the playoffs for this revamped team.

NFL

Antonio Allen returns to practice after concussion

Antonio Allen was cleared to practice again following his concussion two weeks ago.

Parenting

In defense of making a mess during playtime

"Recipes for Play" authors Rachel Sumner and Ruth Mitchener think playtime should involve the five senses and making a mess is part of the fun.

Wellbeing

Jason Hope helps push anti-aging efforts forward

Reporter was commissioned to write this in-depth article When it comes to age-related illness, the direction of modern medicine seems more reactive than proactive. In…

Wellbeing

Today's Doomsday preppers: a closer look at survivalist…

Reporter was commissioned to write this in-depth article. The term “Doomsday prepper” is often associated with the paranoid, anti-government stereotype of the 1990s. The truth…

Education

These college students think breakfast is the most…

  It should be no surprise that the city that never sleeps is also home to the most students who like to order food in…