[JURIST] A judge in the US District Court for the Southern District of New York [official website] on Friday rejected a proposed settlement to address the claims of people with illnesses from working on the World Trade Center (WTC) in the months following 9/11 [JURIST news archive]. Judge Alvin Hellerstein cited concerns [WP report] over the fairness of claim amounts and the process to determine compensation as over-complicated. In addition, the judge said that lawyer fees should be limited and paid by the WTC Captive Insurance Company rather than by the claimants. The settlement [NYT report], announced last week, would have addressed more than 10,000 claims and would have awarded up to $657 million if all claimants accepted the settlement. Claimants would have been required to accept the terms of their settlement within 90 days and would have been allowed to appeal settlement amounts. Hellerstein will now require WTC Captive Insurance to consult with claimants on the settlement's terms, and he ordered judicial supervision of the claims process. The settlement will not be considered finalized until 95 percent of claimants have approved [NYT report] it. WTC Captive Insurance President Christine LaSala decried the judge's decision on what the insurer views as a fair settlement [fact sheet], and considered that the decision would render compensating claimants more difficult [WSJ report].

The WTC Captive Insurance Company is a non-profit company that was created by Public Law 108-7 [text, PDF] with $1 billion in Federal Emergency Management Agency (FEMA) [official website] funding to provide for workers' claims over sicknesses contracted from exposure at the WTC site in the months following 9/11. In 2007, the City of New York agreed to enter into settlement negotiations over a federal class action lawsuit filed on behalf of more than 9,000 emergency and cleanup workers who may have inhaled toxic dust at WTC site, which Hellerstein allowed [JURIST reports] to proceed.