For immediate release

Contact: Jeff Lungren/Terry Shawn

November 14, 2002

202-225-2492

WASHINGTON, D.C. - House Judiciary Committee Chairman F. James Sensenbrenner, Jr. (R-Wis.) released the following statement from today’s House debate on the terrorism insurance bill.

“Mr. Speaker, I rise in opposition to this conference report because it fails to include critical liability protections for victims of terrorism, which are particularly important because the conference report creates a federal indemnification program that puts the American taxpayer on the hook for damages caused by terrorists.

“It’s important to note what trial lawyers did to mark the first anniversary of the terrorist attacks on September 11th: they’re suing American companies that were themselves the victims of the terrorist attacks. According to the Washington Post: ‘Things really are returning to normal a year after the terrorist attacks. Trial lawyers -- surprise! - are headed back to the courthouse [and] there is a rush by lawyers ... to sue airport operators, airlines, security companies, the builders of the World Trade Center and others ...’

“Let’s face facts. Terrorist-inspired litigation is not a garden variety tort case. A banana peel is an accident waiting to happen, but a terrorist is a suicidal fanatic bent on killing innocent people and causing mass destruction of property. Even the most diligent property owners can’t always guard against such attacks.

“To protect innocent Americans, the provisions in the terrorism insurance legislation the House passed a year ago provided that in a lawsuit for damages arising out of a terrorist attack, no punitive damages would be allowed against victims of terrorism. The bill before us today fails to include that basic protection, and in doing so, it fails to ensure that Americans do not become victims of terrorists twice: first during the initial wave of death and destruction caused by terrorists, and second by legal aftershocks caused by the unquantifiable and unpredictable damage claims brought by trial lawyers.

“While the bill before us today excludes punitive damages awarded in court from insured losses paid by the U.S. taxpayer, the mere allegation of punitive damages always boosts the settlement value of cases, and this bill leaves U.S. taxpayers paying the inflated costs of those cases settled out of court. In doing so, it requires American taxpayers to engage in an egregious form of national self-flagellation: American taxpayers are punished for the evil acts of foreign enemies.

“The Washington Post’s editorial page has stated ‘On insurance, the Democrats are objecting to Republican proposals to ban punitive damages in the event of terrorist attacks, which seems a reasonable proposal ... The Democratic position on terrorism insurance smacks of the trial bar, which never saw a disaster that didn't justify a lawsuit.’ And just a few weeks ago, the Washington Post stated that ‘[t]he Democrats should indeed be embarrassed’ by their efforts to defend lawyers at the expense of the American economy.

“The terrorism insurance bill the House passed last year also provided that defendants could only be liable for the amount of damages for pain and suffering in direct proportion to the defendant’s percentage of responsibility for harm. That provision allows Americans who are victims of terrorists to rely, at the very least, on their own innocence to protect them from liability. You might remember that in the No Child Left Behind Act, which overwhelmingly passed both the House and Senate, the very same rule was applied to protect teachers. If that provision is good enough for teachers, it should be good enough for victims of terrorism.

“The bill the House passed last year also provided that fees for attorneys suing victims of terrorism could not be greater than 20 percent of the damages awarded or the amount of any settlement reached. That provision is simply a continuation of the long-standing federal policy behind the Federal Tort Claims Act: namely, that lawyers should not profit excessively when they are paid from the U.S. Treasury. Especially today, in a time of war, excessive lawyer fees drawn from the U.S. Treasury should not be allowed to result in egregious war profiteering at the expense of victims, jobs, and businesses.

“The conference report before us today does not include these protections for victims of terrorism that were in the bill this House passed a year ago. It gives lawyers the keys to the U.S. Treasury and it gives lawyers a license to further prey on victims of terrorism.”