Tort and Social Welfare Principles in the Victim Compensation Fund

Abstract

The World Trade Center Victims' Compensation Fund is based on a blend of a private law regime (tort law) and government benefit programs rooted in public law. Unlike other programs that straddle the divide between these two regimes, the Compensation Fund has no of funding mechanism that distances government from the distributional choices reflected in both the compensation scheme and in individual compensation decisions.As a result, the Fund raises the possibility of awards determined by a tort model that are directly funded out of the U.S. treasury. Looked at from the standpoint of social welfare law, such a distributional scheme appears problematic. Departures from the tort model of compensation, however, may appear illegitimate to those who see the Fund solely as a surrogate for the tort system. This tension underlies many of the dilemmas that Special Master Kenneth Feinberg has faced. He has sought to resolve them by publicly stating that he will reign in the extreme consequences of the tort system. At the same time, he has reserved discretion in handling individual cases. This cloud of discretion obscures the actual way in which he has chosen to resolve the tensions between the two systems.

Similar tensions inform the procedural regime created by Congress and Special Master Feinberg. Should the Special Master be viewed as a mediator in a mass tort case, or as a government adjudicator? The paradigm selected has important ramifications for the procedures used by Special Master Feinberg and for the standards by which his conduct should be assessed. Special Master Feinberg has gravitated closer to a mediation model rather than an adjudicative approach. This choice neglects the fact that claimants have significant due process interests at stake that are not fully protected by a mediation approach. Moreover, the mediation model places great emphasis on the conduct and statements of the Special Master, making it difficult to conceive of the Fund a legal system, rather than an expression of Mr. Feinberg's personal preferences. This overemphasis on the person of the Special Master is a major flaw in the program's design.