Federal judge likes deal increasing money pool for WTC responders

The federal judge overseeing a settlement between World Trade Center responders suing over health plans and lawyers for New York City and its insurance company Thursday lauded a revised compensation package as "a very good deal" for the plaintiffs.

U.S. District Judge Alvin Hellerstein, in a statement, said, "I am very excited about this deal." The new agreement, he said, means thousands of plaintiffs will be "assured of a fair deal that puts money in their hand fast."

The new settlement proposal provides an additional $125 million to the value of the compensation package, according to a statement issued Thursday by attorneys for the city's insurer.

The new proposal calls for the city and its contractors, through their insurers, to kick in an additional $55 million, raising the top line of the package - making the revised package worth between $625 million and $712 million, lawyers said.

Attorneys for the responders will reduce their fees from 33 percent to 25 percent, a move that will net another $50 million for responders. Finally, the city also will waive its right to recover workers' compensation payments from responders who settle. That will allow responders to net another $20 million, according to the lawyers.

Most of the new money will go to those with the most severe injuries, the lawyers said.

"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," the president and chief executive of the WTC Captive Insurance Co., Christine LaSala, said in the statement.

The WTC Captive is a not-for-profit insurance company enabled by Congress to "defend and indemnify" the city and contractors it hired for rescue, recovery and debris removal operations after the terror attacks on Sept. 11, 2001.

Under the new agreement, responders claiming "debilitating respiratory illnesses" such as severe asthma - asthma contracted by a "nonsmoker within seven months of exposure at the World Trade Center site," according to the statement - could receive between $800,000 and $1.05 million.

About $1.5 million could be provided as compensation of claims in which death was caused by post-9/11 operations.

Plaintiffs who have no qualifying injury but have a legal claim for the "fear of becoming sick" will receive $3,250.

The statement said all qualifying plaintiffs will be enrolled in a special insurance policy through MetLife to provide coverage for "certain blood and respiratory cancers diagnosed during the coverage period" - for a benefit up to $100,000.

The parties reported to Hellerstein about the new proposal Thursday morning in federal court in Manhattan. A previous deal, announced in mid-March, called for responders to receive between $575 million and $657 million.

But Hellerstein said he would not approve that plan because it didn't provide enough money for Sept. 11 responders - and allowed too much for lawyers' fees.

The city appealed, claiming Hellerstein didn't have the power to obstruct a private settlement. Nevertheless, negotiations continued toward a new deal that the judge might find more acceptable. Hellerstein a week ago described those talks as intense.

A neutral third party, known as an Allocation Neutral, will oversee the valuation of each claim, according to the statement released Thursday. That, officials said, is meant to "ensure transparency and independence in determining compensation for each plaintiff."

Kenneth R. Feinberg, the former special master for the U.S. government's September 11th Victim Compensation Fund, will be what is known as the Claims Appeal Neutral.

He will determine appeals requested by plaintiffs seeking a review by the Allocation Neutral - in this case, the Garretson Firm Resolution Group.

The proposed settlement - including an overview and the agreement with Exhibits A through U - can be viewed on the U.S. District Court's website at nysd.uscourts.gov/cases.php?form=sept11.

The settlement and its exhibits, as well as news releases and other information about the World Trade Center litigation, also can be found at http://877wtchero.com, the website of the Manhattan law firm Napoli Bern Ripka Llp.

With John Valenti