The past week has been a whirlwind of tragic loss, law enforcement drama, and catharsis in the wake of the Boston Marathon bombings. As the machinery of the U.S. criminal law system ramps up to prosecute the surviving member of the bombing team, its civil side will have to address the human suffering left in the bombers' wake.
The torts system theoretically provides victims with a compensation scheme when bad actors harm them, but here, as happens regularly, the personal wealth of the bad actors will be woefully insufficient and any insurance, unavailable or nonexistent. For recent mass tragedies, particularly politically heartbreaking ones, federal or state governments have created funds to help fill this vacuum. The 9/11 Compensation Fund was the largest and most notable, but smaller ones were created after the Virginia Tech tragedy (by the State of Virginia) and the Aurora, CO shooting (state of CO and private donations). One Fund Boston (city, state and private donations) promises to dwarf the latter two. Ken Feinberg, compensation fund master of many of these past funds, including the BP fund, will oversee OFB.
The torts system generally calculates compensation in two ways. For those who are killed by intentional acts, by replacing the future economic income stream of that person for dependents. This is a morally chilling calculation and one that torts students are reluctant to embrace. For those who are injured, torts damages try to reimburse past and future out-of-pocket costs for medical expenses, lost wages and limitations to daily activities. For the severely injured, these costs/damages can be extraordinarily large. For those who are killed, these damages can be small (of the three killed at the marathon, two had no income or dependents and one was a restaurant manager). Compensation funds have veered from "the shadow of torts,' probably because of a finite pool of money and political considerations. Funds may be less generous, by considering effects of private insurance and pensions (a proposal for the 9/11 Fund, which did not last long) or by excluding victims with merely emotional harm, though severe. Funds may also be more generous, by establishing minimum payouts, even for those with lesser physical injuries or for deaths of those with no income (such as the Virginia Tech students or child victims). Funds must balance traditional legal theories of bad actor-funded compensation with political realities of back-stop fund compensation.
One Fund Boston introduces two new wrinkles to fund compensation. First, many of the injured were residents of Massachussetts and covered by "Romneycare." If the fund chooses a "backstop" approach, then much of at least the initial care would be covered by insurance. Fourteen victims lost limbs, so we will see how much of these extraordinary costs will be covered by insurance. Second, many of those with grievous injuries have already set up there own funds and are raising large amounts of money. The NYT article on OFB today mentions one site up by alumni of Lawrence Academy for the White family (three injured), which has raised over $58,000. The Corcoran family, who saw the mom lose both legs and a daughter who was injured in the leg, has a site that has raised ten times that amount ($589,000) on their site. As an improvement to fund compensation, these victims have instant access to these funds, though the donors would not seem to have a charitable deduction available. However, I wonder about whether victims who are more telegenic, web-articulate, or networked have an advantage in attracting donations from strangers that might have gone into a general fund. Corporate donations seem to be headed toward OFB, but individuals like to bypass bureaucracy and give directly to those they feel a connection to, so the success of these funds is understandable. However, I wonder whether under a backstop theory of compensation, these funds should be deducted from payouts from a general fund.
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