The Genie and The Bottle: Collateral Sources Under the 9/11 Victims Compensation Fund

Abstract:     
The September 11th Victim's Compensation Fund provides substantial payments to the families and loved ones of those who died in the 9/11 attacks. Interestingly, unlike any other form of social insurance, and unlike the tort system, the awards from the Fund are offset dollar-for-dollar by certain forms of collateral sources, including life insurance proceeds. This paper exams what function collateral sources (and the traditional rule of "collateral nonoffsets") together with subrogation rights generally play in a tort/compensation regime and why a collateral source offset rule probably make sense in the case of the 9/11 Fund. Our analysis also calls into question the traditional practice among life insurers of not retaining subrogation rights in their insurance policies or, in the absence of such subrogation rights, the traditional rule of collateral nonoffsets in wrongful death cases. The same sort of overcompensation concerns would seem to apply there as apply in the context of the 9/11 Fund.

Number of Pages in PDF File: 35

working papers series