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A U.S. federal judge on Friday delayed a $657.5 million settlement for workers who suffered health problems after the September 11, 2001, attacks, saying the process must be transparent and lawyers fees should not be drawn from the funds.
The judge said the settlement set too much money aside for future payments and more of it should be given out immediately. He said he would preside over meetings with workers involved in the settlement.
Hellerstein also said fees for lawyers representing the workers should not be drawn from the $1 billion fund set aside by the federal government to help cover the claims but should be paid by the federally financed WTC Captive Insurance Company, created in 2004 to insure New York City and some contractors.
"I have in mind that people are tired and what I'm going to say is going to suggest some delay," Hellerstein said. "In my mind this settlement is not enough."
"I am very disappointed that the judge has now made it more difficult, if not impossible, for the people bringing these claims to obtain compensation and a settlement," LaSala said in a statement.
That sentiment was echoed by the city's top lawyer, Michael Cardozo, who said Hellerstein's reaction to the settlement "will make it extremely difficult to resolve these cases."
The federal judge overseeing litigation between the city and workers at ground zero on Friday rejected a settlement, telling lawyers that, "..it (the settlement that provided for payouts totaling $575 million to $657.5 million in cases filed by some 10,000 rescue and cleanup workers who say they suffered health damages from toiling at ground zero after the 2001 terrorist attack.) did not provide enough compensation to plaintiffs and needed to be renegotiated" under his supervision.
"This is no ego trip for me”, Judge Hellerstein told a packed but hushed courtroom moments after hearing emotional testimony from some of the plaintiffs. "This is work. I will preside over a process that’s fair.”
"There has to be additional negotiations to come up with a better and fair settlement," he said. "I will not preside over a settlement based on fear or ignorance.”
But at Friday’s hearing Judge Hellerstein went much further, declaring that the settlement was not enough and that he was taking judicial control. He said that he was concerned that the fees going to the plaintiffs’ lawyers - about one-third of the settlement - would take a very large bite and that he planned to review them.
The judge said those fees should be paid by the same insurance company that is to cover any settlement and has been covering legal fees incurred by the city. Its reserves stand at $1.1 billion.