Mass Tort Funds and the Election of Remedies: The Need for Informed Consent

Article excerpt

I. INTRODUCTION 833

II. THE WTC VICTIM COMPENSATION FUND, ELECTION OF REMEDIES, AND WAIVER OF THE RIGHT TO SUE .......840

A. Timing of the Election of Remedies.............. 842

B. Statutes of Limitations issues................ 844

C. Applicable Law Considerations................... 846

D. Potential Defendants................... 851

E. Viability of Future Claims............. 854

F. Assistance of Counsel.................. 856

G. Implementation of the WTC Litigation Option................ 859

III. THE GCCF, ELECTION OF REMEDIES, AND WAIVER OF THE RIGHT TO SUE...............864

A. Timing and Scope of the GCCF Release........... 866

B. Statutes of Limitations Issues and Applicable Law................ 868

C. Potential Defendants............. 872

D. Viability of Future Claims............. 873

E. Assistance of Counsel............... 875

F. The BP Gulf Oil Litigation Options........... 879

IV. CONCLUSION: THE NEED FOR INFORMED CONSENT TO ACCEPT A MASS DISASTER FUND AWARD AND WAIVE THE RIGHT TO SUE............ 884

I. INTRODUCTION

The twenty-first century may very well mark both the advent and triumph of fund approaches to resolving mass tort litigation. After more than forty years of attempted class action resolution of mass tort claims - with often controversial and problematic results - the use of no-fault alternative compensation systems styled as "funds" may emerge as the most efficacious, if not the most preferred, technique for settling aggregate litigation. The fact that various actors involved in mass tort disasters have converged in support of fund approaches to resolving aggregate claims heralds a new chapter in the resolution of mass tort litigation.1

The unprecedented attacks on the World Trade Center towers on September 11, 2001 gave rise to the creation and implementation of the equally unprecedented World Trade Center (WTC) Victim Compensation Fund.2 The WTC Victim Compensation Fund was the first large-scale use of a no-fault, non-litigation fund approach to resolve massive tort claims in the United States,3 apart from previous class action settlements, such as the "Agent Orange" fund.4 Less than a decade later, following the explosion of the Deepwater Horizon oil rig in the Gulf of Mexico,5 the BP oil company, in loose coordination with the government, set up the Gulf Coast Claims Facility (GCCF),6 patterned after the WTC Victim Compensation Fund.7

The WTC Victim Compensation Fund and the GCCF have both been widely praised8 as well as criticized on various grounds, ranging from detailed critiques of implementation criteria to more wide-ranging discussions of fundamental fairness and justice.9 The purpose of this paper is not to revisit that commentary and those debates,10 of which assessments undoubtedly will continue to emerge over time as scholars produce more considered analyses of the success and failure of the WTC Victim Compensation Fund and the GCCF.

Instead, this article focuses on a narrower, but perhaps more fundamental issue inherent in fund approaches to resolving mass tort claims. Both the WTC Victim Compensation Fund and the GCCF operated alike in requiring potential claimants, at some fixed deadline, to make an election of remedies: either to participate in the Fund and waive the right to litigate in the tort system, or to decline to receive remediation through the Fund and thereby preserve any rights to adjudicate claims in the future.11

This election of remedies and waiver of the right to sue is, obviously, essential to the success of the fund alternative; the very purpose of the fund resolution of mass tort claims is to avoid the tort litigation system. As will be discussed, close to 97% of eligible WTC claimants agreed to a Fund award and therefore signed a waiver of their right to sue.12 Similarly, thousands of Gulf Coast claimants who received final awards from the GCCF also waived their rights to sue. …