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Terrorism Policy Research
Terrorism Victims' Compensation Policy
Background
The September 11 Victim Compensation Fund (VCF) is an unprecedented federal program that provides compensation to victims of the September 11, 2001, attacks. Created as part of the Air Transportation Safety and Stabilization Act, it represented an extraordinary expression of support to the families of the victims.
It is also controversial. Some have argued that it is too generous, while others have argued it is not generous enough. More subtly, some have argued the use of a tort-like compensation scheme that compensates high-income workers more than low-income workers is inappropriate. Others have argued that it is unfair to victims of other terrorist attacks who are not eligible, such as the victims of the Oklahoma City attack.
It is still unclear how many families will seek compensation from the Fund, and how many will instead seek to use the civil courts. As with terrorism insurance and liability policy, it is unclear whether in future attacks, the approach adopted after September 11 will be repeated.
RAND Research Goals
The RAND Center for Terrorism Risk Management Policy is currently studying the full range of compensation available to victims of the September 11 attacks. The compensation sources include the VCF, as well as insurance, charities, and the civil courts. The victims range from the deceased and their families, to the injured, to small business owners and residents in lower Manhattan. The first set of research results are expected in the fall of 2003, but many questions remain and will be included in the research agenda of the Center. The questions that may be pursued include:
- How successful in practice are the compensation programs and approaches of other countries, including the United Kingdom, Spain, Israel, and South Africa? Are there lessons for the United States? We envision case studies of particular terrorist attacks in foreign countries, with comparisons to the experience with September 11 and other attacks in the United States.
- Can an administrative system be designed for future terrorist attacks? What would be the scope of such as system in terms of eligibility? What would be appropriate compensation, including the payment of noneconomic damages and the use of tort-like calculations for payment of economic losses.
- How should disputes over the amount paid and eligibility be decided? In the case of the VCF, considerable authority to decide disputes was vested in the Special Master, but other approaches may be appropriate if this model or an alternative model is adopted in the future.
- Is an administrative compensation system a realistic replacement for terrorism insurance, perhaps with administration by insurance companies, as some have proposed as an alternative to TRIA? Is such a system a realistic replacement for civil liability, as is currently the case for those who opt into the September 11 VCF?
Whether a terrorism compensation program is established after an attack or ex ante, the questions of appropriate eligibility, future scale of the program, types of compensation paid, and financing for the program require a firm understanding of the terrorist threat. The Center will support research to that end.
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