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Grief and the Free Market

If you lost an arm in a large scale terror attack like the Boston Bombings, how much compensation should you receive? Short answer: it depends.

by Wendy Syfret
Sep 5 2013, 5:15am

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If you lost an arm in a large scale terror attack like the Boston Bombings, how much compensation should you receive? Short answer: it depends. How long were you in hospital for? How much do you earn? How much media coverage did the event get? How much does the public care about what happened to you? Is the money you’re receiving privately donated or from government funds? And are you willing to give up your right to sue?

If that sounds like too much for one person to handle, you’re probably right. But Ken Feinberg is the guy whose job it is to look at all these factors and decide how much each arm, ear, or life is worth. He’s been doing it for decades and is the go-to-guy for people like President Obama when it comes to handling large scale compensation cases. He understands better than anyone how much you’re worth, whether the parts that make you whole all in one piece or otherwise.

VICE: You’re often referred to as “The Pay Czar”, or “The Pain Accountant”. Do you embrace those titles?
Ken Feinberg: I think they’re ill advised. They’re an attempt to label a very complex undertaking. When you really analyse what I do, it’s not arbitrary or lightly entered into—it’s very stressful and challenging. It’s very humanising. Shorthand phrases or buzzwords do not do these assignments justice.  

How would you describe your work?
I place a dollar value on lost lives, injuries, or mental trauma. I do what judges and juries do everyday, but in a very visible way involving hundreds or thousands of victims.

That sounds complex to say the least. Do you have a formula you work to?
Not exactly. There’s no standardised formula because every tragedy and assignment is characterised by different variables: number of injured or killed, amount of money to distribute—one size does not fit all. But the objectives are similar: get the available money out to the recipient as quickly as possible, with a minimum of emotional trauma.

You mentioned money as a variable. Why is so much available for large scale tragedies, but not for things like street crime?   
Street crime is a daily occurrence. People and congress do not volunteer or fund special programs for day-to-day risk.

It’s when the public psyche is impacted by something like 9/11, when the public, not the victims, is emotionally drawn into the conflict they decide to help. That’s the trigger point where money is donated. The public needs to be galvanised into acting and coming to the support of victims.

So before you get a chance to evaluate a tragedy, the public kind of does it for you with their donations.
It’s a free market. The public remains interested only as long as media attention prevails. At some point the public loses interest in the day-to-day emotion of the tragedy and the funds stop flowing. But it’s amazing to see how widely varied the response is to these tragedies are. Aurora Colorado shootings 5 million; Newtown, Connecticut with the children 11.5 million; Boston marathon, a terror attack was 60 million; there are wide, wide discrepancies. And like you say, street crime—no million.

The interesting philosophical dilemma is why some people who are innocent receive large amounts of money from the public, while other victims—who are just as innocent—receive nothing. That’s the free market I guess.

I read the 1993 World Trade Center attack victims weren’t compensated. Why do we react more monetarily now than we did 20 years ago?
Well it’s not that we didn’t do it 20 years ago. We may not have done it as transparently or as promotionally. I think the main reason is you see more 24/7 news coverage. That’s one very important reason. The second is, when a fund works it’s tried again. Familiarity breeds similarity. But these funds are rare, it’s not a common phenomenon—nor should it be.

Why not?
Bad things happen to good people everyday. When  funds are created for certain victims it raises important equity issues, contrasts victims, and questions of elitism and equal protection of the law.

Your continued, intensive exposure to tragedy must wear you down. Why do you keep doing it?
How could someone say no to President Bush or President Obama? As a citizen of the public community I find it impossible to turn down a request to come to the aid of fellow Americans. Now it’s very difficult, and I don’t think I’m the only one who can do it, but if I’m asked to do it I will.

If others could do it, why are you still the guy?
When I’m asked to do it, it’s because I did the last one. It worked well, so I’m asked to do it again. I don’t think there’s any rocket science to it, most people with the patience and fortitude to deal with the emotional aspect of it could do the same thing.

How much of this job is instinct and how much is pure algorithms?
That’s a tough question. There’s a lot of maths, but to be done right you have to be empathetic. You can’t help being emotional, you’d need a heart of stone not to be. You try deal with each person, or their family, as an individual. It gets very, very stressful.

I saw a table published after the Boston Marathon that said X amount of time in hospital equalled Y amount of money. But how much does emotional damage come into it? How can you quantify that?
You don’t. It’s very rare that we’ve had a program where we pay for emotional damage. We did in 9/11, but it was a standardised formula we quantified. We said for emotional damage: pain and suffering, emotional distress—we would pay a flat formula of $250,000 for the death of a victim, and a $100,000 for each surviving spouse and dependant.

In Virginia Tech we only had enough money to pay for emotional distress for those who were in the classroom when the shooting took place, who survived. But in Aurora, Colorado and for the Boston Marathon, and in Newtown, Connecticut we had no money for emotional distress without physical injury.

I understand the amount of money available is the biggest factor in how much people receive, but are there other factors that play into a person’s worth?
No, in cases involving private donated money, where it’s a gift and you don’t give up your right to sue in court. Yes with public money like the 9/11 fund where in order to receive compensation you had to surrender your right to sue. You have to give a decent amount of money to every plaintiff in order for them to elect whether or not to take the money or litigate.

So with that in mind are you able to estimate projected compensation? If I say, I’m a 25-year-old woman—
I’m a 25-year-old woman working as a banker in the World Trade Center making 13 million dollars a year, if you want my family to waive their right to sue, and you want me to come into a no fault victim compensation fund, you better pay me six million dollars.

Now if I’m a 25-year-old woman who's a secretary earning $50,000 and you want me to waive my right to sue well you better pay me $800,000.

Wow you worked that out quickly. Has this work changed the way you see the world?
Yes, in the sense that I’ve learned never to underestimate charitable impulse of the American people. The voluntary giving of financial help to victims is astounding and amazing to me.

It’s changed me in the sense that I’ve become more fatalistic. Most of the people I’ve helped compensate were totally innocent, just in the wrong place at the wrong time. When your number’s up your number’s up I guess.  

Do you automatically calculate the value of people you meet?
I try keep it compartmentalised. I try and have a professional obligation and not let it influence the rest of my life, but unless you have heart of stone not to have it spill over. I can tell you that. Try sleeping at night.

Have there been situations you’d handle differently in hindsight?
Everyone of them. In the BP oil spill I don’t think I did enough to bring the American lawyers into the fold like we did in 9/11. In 9/11 some of the statements I made to the surviving families were coarse and not thought out enough. You make decisions everyday you regret when you’re doing this kind of work.

One aspect of your work that’s particularly astounding is the number of people you interview and meet. I read that you spoke to 15,000 people after September 11. What have you learnt about people?            
You learn is how diverse human nature can be. The reaction of the victims and their families to tragedies is diverse; the anger, disappointment, hope, despair, religious reaffirmation, and agnosticism. Every conceivable frustration, every conceivable satisfaction, every conceivable emotion comes my way.

You can’t help wonder at how many tragedies confront people and how you can’t predict when, where, and how tragedy will strike. You become fatalistic.

Is becoming fatalistic something you lament?
Yes. You think you control your destiny a little more than you do. Some people feel confident they can map their future with some degree of assuredness, I envy that.

Why do some tragedies generate more money than others?
I think that tragedies, for whatever reason, captivate the public. Terrorism is an attack against the country, not only the victims, so people react. Now with the 24-hour news media, and the cable news’ instant emotional gratification, you have the public getting very emotional and immediately sitting down to write a cheque. 

Follow Wendy on Twitter: @WendyWends

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