Financial Compensation for Catastrophic Loss in the United States
Robert L. Rabin
Stanford Law School
Suzanne A. Bratis
Stanford Law School
Stanford Public Law Working Paper No. 106
FINANCIAL COMPENSATION FOR VICTIMS OF CATASTROPHES: A COMPARATIVE LEGAL APPROACH, M. Faure, T. Hartlief, eds., Springer, 2006
This paper addresses the complex institutional structure in the United States for dealing with victim compensation in cases of catastrophic loss. It will appear as a chapter in a multinational study that compares the institutional frameworks adopted by Western European nations and the United States.
Part I of the paper focuses on catastrophic loss triggered by potentially responsible human agencies, and as a consequence, discussion of tort law is central. But what of situations where no human agency can be charged with responsibility for catastrophic harm? In these cases there is no recourse to tort in most instances, and victims of catastrophic loss ordinarily must rely exclusively on private insurance coverage, or, when available, on public insurance systems. The latter can be parsed into two separate categories: social welfare schemes (discussed in section II of this paper), such as government disability and unemployment insurance legislation, which are available to all claimants meeting general eligibility requirements - without reference to the source of the harm that has occurred. And, legislative no-fault or insurance schemes that have been established with designated types of catastrophic loss in mind. This second category of social welfare legislation is discussed, along with a description of private insurance coverage, in section IV - after examining the government agency whose work is devoted exclusively to disaster relief (in section III, on the Federal Emergency Management Agency).
Section V of the paper serves as a reprise on the somewhat patchwork design of the U.S. system by isolating for special consideration three case studies of particularly salient disaster events that illustrate the range of approaches discussed earlier: First, the terrorist acts of September 11, and, in particular, the legislative no-fault compensation scheme that was enacted to compensate the personal injury victims; second, Hurricane Andrew, which initiated a mixed private/public insurance scheme in Florida and recast FEMA's approach to disaster relief; and third, commercial airline crashes, as a category, which invoke tort as the principal source of disaster relief compensation.
A concluding section VI of the paper returns to a more general overview of the system, offering a brief final commentary on fairness and efficacy considerations.
Number of Pages in PDF File: 62
Date posted: April 19, 2005