“Who Gets What” - Setting Compensation After Tragedy

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Text, Wednesdays With Woodward, registered trademark, Webinar Series

Joan Woodward in a video window in the upper right corner.

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JOAN WOODWARD: Hello, good afternoon. And welcome to Wednesdays with Woodward. I'm Joan Woodward. And I'm honored to lead the Travelers Institute, which is the educational and public policy arm of Travelers.

We are joined by a very, very special guest today. But before we get started, I'd like to share our disclaimer about today's webinar.

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Text, about Travelers Institute (registered trademark) Webinars. The Wednesdays With Woodward educational webinar series is presented by the Travelers Institute, the public policy division of Travelers. This program is offered for informational and educational purposes only. You should consult with your financial, legal, insurance or other advisers about any practices suggested by this program. Please note that this session is being recorded and may be used as Travelers deems appropriate.

The partner logos below text, "Who Gets What" - Setting Compensation After Tragedy.

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And a special thanks to our partners today, the RAND Corporation, MetroHartford Alliance, the Darla Moore School of Business at the University of South Carolina, and the American Property and Casualty Insurance Association.

Today we're talking with Ken R. Feinberg, one of our country's most respected and sought-after mediators. After some of America's worst disasters, victim families and survivors have been financially compensated sometimes through public funds, sometimes the generosity of private donations, and sometimes through government-imposed settlements. Each of these victim funds has required a trusted experienced third party to determine how compensation is distributed and to do it transparently and efficiently.

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Photos and text, Speakers, Joan Woodward, Executive Vice President, Public Policy; President, Travelers Institute; Travelers; Vice Chair, Board of Advisors, RAND Institute for Civil Justice. Kenneth R. Feinberg, Special Master of The 9/11 Victim Compensation Fund; Trustee, RAND Corporation

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It has been Ken Feinberg who has gotten the call from Presidents, Attorneys General, and others after tragedies, including the mass shootings, many mass shootings, the Boeing 737 MAX plane crashes, the 2010 BP Gulf oil spill, and chemical exposures, such as Agent Orange or the Roundup, registered trademark of Monsanto Technology LLC, weed killer. It was also his job to determine executive pay after taxpayer funds were used to bail out financial institutions and on automobile companies in 2009 under the TARP. And, of course, it was Ken who volunteered to determine and oversee the Victims Compensation and the terrible aftermath of 9/11, all pro bono work. A true public servant, Ken.

Ken has been central to these complex legal disputes, making the difficult decisions, and create innovative compensation solutions after tragedy and financial upheaval. In other words, Ken has held an extraordinary and unenviable unique assignments in determining who gets what. Ken says he's learned firsthand how compensation and human nature interact.

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Feinberg's two books. What is Life Worth? The Unprecedented Effort to Compensate the Victims of 9/11, and Who Gets What, Fair Compensation after Tragedy and Financial Upheaval

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He's written two books about his work and his life and what has taught him.

So, What is Life Worth, published in 2005, detailed his experience in the 9/11 Victims Fund and became the inspiration, actually, for a Netflix, registered trademark, movie in 2021, so just last year. That Netflix movie, if you haven't seen it, is called Worth.

And in 2012, he wrote Who Gets What, detailing his broader experience on these types of cases. I've read both books. My friends, they're incredibly interesting. And if you haven't got a copy, we still have several copies left of his 2012 book. We'll put that in the chat how to get that shortly.

In addition to being one of the nation's top lawyers, Ken is a former prosecutor, a former Chief of Staff to the late Senator Edward Kennedy and is an adjunct professor of law at Georgetown University and University of Pennsylvania, Columbia University, and NYU. Ken is also a trustee and an advisory board member of the RAND Corporation, where he recently had a center named for him, the RAND Kenneth R. Feinberg Center for Catastrophe Risk Management and Compensation.

Today we have the distinct honor of talking with Ken about what he's learned through his decades of mediation and what lessons we and the insurance industry can take from his unique experiences dealing with some of America's most gut-wrenching catastrophes.

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Woodward and Feinberg in a split screen.

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So, Ken, thank you so very much for joining us. We really appreciate your time and just learning from all of your experiences and how we can better interact with the courts, the lawyers, and all of our clients. So, again, thank you for coming on today, Ken.

KENNETH R. FEINBERG: Good to be here. Glad to be here.

JOAN WOODWARD: I just want to ask you kind of a first kick-off question. And then, obviously, we're going to get into lots of fireside chat and back and forth. But why don't you take a few minutes and really tell us what made you pick up that phone in September of 2001 and call your friend Senator Chuck Hagel to volunteer to administer this newly created 9/11 Victims Fund.

KENNETH R. FEINBERG: Patriotism. Right after 9/11, you'll recall, thousands of Americans around the nation offered their services one way or another to help the victims, their surviving family members. And I saw in a newspaper that Congress had just enacted a special, unprecedented, publicly financed 9/11 Victim Compensation Fund for the victims and the survivors of the four airplanes, the World Trade Center, and the Pentagon.

So, I contacted Senator Kennedy and my friend Chuck Hagel. They contacted the President and Attorney General John Ashcroft. And I interviewed. And, quickly, I was designated the special master to design and administer this unique fund.

JOAN WOODWARD: Well, that is really--that's really just incredibly important to hear how it came about. And then when that initial discussion happened, it seemed to happen on the outside so quickly that Congress passed this. And they set it up in a way that was--again, I worked in Congress.

As you know, it takes a long time to do a lot of things. But this seems so quickly. And was it set up in a way that you felt was fair and equitable? And did they think of all the other, if you will, scenarios that might play out? Or were you just given kind of authority to do what you felt was right?

KENNETH R. FEINBERG: Well, it was a combination of both. You're right. The law was enacted just 13 days after the attacks. There were no committee hearings. Congress didn't deliberate.

This was spur of the moment, brought about by, first, the airline industry, very concerned that ongoing litigation about 9/11--the World Trade Center, the airlines, Massport, the Port Authority of New York--that that litigation would drive the airlines right into bankruptcy. And that was one factor.

The other factor, frankly, was, I think, national patriotism, a view that, well, if we're going to bail out the airlines, let's also provide would-be victims, litigants, with an opportunity, purely voluntary, to come into this separate independent program. Congress laid out in the statute of the pillars of the program, the structure, but left a great deal delegated to the discretion of the special master, myself, to design and implement and administer the program. And for the next 33 months, that's exactly what I did, what my colleague, the Deputy Administrator Camille Biros did. And that's what we did over the next 33 months.

JOAN WOODWARD: So, when a tragedy is--when it just happens and the loss is so raw for so many people, how do you get families to think about compensation for someone they just lost, and they haven't really fully grieved yet? Is there ever a right time for that? And how did you take that--where did you get the strength to kind of come up with how you dealt with family grief and putting of a number on it?

KENNETH R. FEINBERG: You have struck the key chord. The most difficult part of administering the 9/11 fund was not calculating value of lives. That's done every day by every court in every state and city and county in this country. The insurance industry does it all the time with great skill, I might add.

This was different. This was a very emotionally charged program. There were years to grieve or even months to grieve.

This was a program established after the raw outcome of the 9/11 attacks and the most difficult aspect of this program by far was not calculating lives but was the emotion associated with permitting any victim or surviving family member privately and in confidence to come and see me and to in the privacy of a conference room vent about life's unfairness and loss. And that part of the job, the emotional overhang of the entire program and not just this program, all these other programs you referenced at the outset, it is the emotional overhang that I think is debilitating and makes the job so difficult time after time after time.

JOAN WOODWARD: And in the book, you talked about--and even the movie, the Netflix documentary, it was kind of clear that they wanted to bring out what you said in the book, which was families wanted to meet with you personally. And it was really important for you to meet with them. You have incredibly talented staff all around you.

But it sounded like that was kind of--you hadn't thought that it was--it had to be you. And how many families did you meet with over the course of those 33 months? And why was it so important that those families, whether it was Agent Orange or Virginia Tech shootings, meet with you personally?

KENNETH R. FEINBERG: You're absolutely right. That was the key to success in all of these programs. The key to success--inviting any applicant, claimant, survivor, family member, victim injured to come and see me. In 9/11, I conducted personally about 900 individual hearings. They were the key to the success of the program.

And you think you've heard everything. But when you sit down one on one and listen to grieving, angry survivors, you never get over it. And it became the key, I think, to so many family members and victims after 9/11 and these other programs opting into the program, receiving compensation, and trying to move on as best they can.

JOAN WOODWARD: So, one of your roles also in deciding all of this--for these, a lot of these programs is to draw lines. And, for example, with the oil spill, how far from the oil spill were you? Or should people who are surviving these mass shootings without any physical injury, but their mental health was clearly damaged, should those people receive compensation? How did you decide to draw those lines?

KENNETH R. FEINBERG: First, how much money do you have to distribute, you see? You can't make everyone eligible if you don't have sufficient compensation available to disseminate. So, in 9/11 or the BP oil spill, the two examples you referenced, we had an unlimited treasury.

The Congress, when it set up 9/11, authorized the program, didn't appropriate any money. The Congress said, Ken, whatever you need to compensate these victims comes out of petty cash from the US Treasury--$7.1 billion BP.

JOAN WOODWARD: So, Ken, there wasn't a cap on the 9/11 fund at all?

KENNETH R. FEINBERG: No. No cap at all. BP oil spill, no cap at all. BP, at the urging, the insistence of President Obama, fronted $20 billion. I mean, $20 billion, I knew that was way more than would be needed to compensate all the victims of that Deepwater Horizon rig explosion and the oil spill.

When you've got enough money available, you can broaden eligibility to include mental anguish or people who otherwise would be far removed from the scene. But when you have limited dollars, like Virginia Tech or the Aurora Colorado shootings or the Boston Marathon bombings, you have to make some tough calls on how you define eligibility and how much money will be available to eligible claimants.

JOAN WOODWARD: So, on that note, in the BP oil spill, you said you received claims from all 50 states, even Alaska and Hawaii. How do you weed out fraudulent claims? And how does that work in terms of--I know you hired a lot of different groups that do investigate and fraud investigations.

But with the thousands of claims that were coming in and the BP oil spill, how do you identify fraud? And these 50 states--I mean, does Nebraska and Oklahoma--what were people filing claims in those states who had no touch point of water? What were their rationale for filing it?

KENNETH R. FEINBERG: Mr. Feinberg, Mr. Feinberg, I have a restaurant, a seafood restaurant, in Oklahoma City or Omaha, Nebraska. Every day, this restaurant, we receive flown in Gulf Coast shrimp. Now, we can't get Gulf Coast shrimp. The oil has prevented shrimping in the Gulf of Mexico.

We have lost 12% of our clientele. Pay me. And we received claims like that, 1,250,000 claims.

Now, you mentioned fraud. There's a big difference between people trying to game the system by submitting real claims and real fraudulent claims--falsified tax returns and stuff like that. The fraudulent claims, we have units that we work with us, anti-fraud companies that help ferret out fraud.

And we send those fraudulent claims to the Department of Justice. And they prosecute. And in BP, of the 1,250,000 claims that we received, we found about less than half of them eligible, less than half. But there were about 25,000 fraudulent claims, which is probably to be expected when you have that many claims.

JOAN WOODWARD: So why do you think 9/11 was different because we had the Oklahoma City bombing? We had the first World Trade Center bombing. Those were kind of the two maybe domestic terrorists’ events that didn't get a fund.

And then the second part of my question is, what about natural disasters, like Katrina or wildfires in California? How do you think about--first part of the question is the domestic terror. Why didn't they get-- and then how do you think about natural disasters? And is that even a possibility to put a fund together to deal with these natural disasters?

KENNETH R. FEINBERG: Why indeed. Ask Congress. Congress decided after 9/11, not after Oklahoma City, not after Katrina. Congress decided that this catastrophe on 9/11 was so unique, so unprecedented in American history, we will set up this program with very generous compensation.

The average award in the 9/11 fund for a death was a little over $2 million tax-free. So, ask Congress why. It decided not only to set up this special program but, here's what's really unique, public taxpayer money. Unprecedented.

I don't believe you'll ever see a 9/11 fund again. There was no 9/11 fund after Katrina or tornadoes or earthquakes. The American people historically are very self-reliant.

You buy life insurance. You hedge against risk. The idea that government is a backstop for special compensation? No. I think the 9/11 fund was the right thing to do at the time. I think it was sound public policy, don't ever do it again, not that way.

And I had great difficulty responding to individuals. Dear Mr. Feinberg, my son died in Oklahoma City in the bombing by a domestic terrorist. Where's my check? Dear Mr. Feinberg, I don't get it. My daughter died in the basement of the World Trade Center in the original 1993 attacks committed by the very same type of people. Where is my check?

And it wasn't just terrorism. Dear Mr. Feinberg, you have to explain something to me. Last year my wife saved three little girls from drowning in the Mississippi River. And then she drowned a heroine. Where's my check?

You'd better be careful. These programs, like 9/11, like BP, like any number of programs, are aberrations. They are not mainstream United States public policy.

And they should be viewed as aberrations. They should be viewed as exceptions to the general approach to dispute resolution. You hire your lawyer. I'll hire my lawyer. Judge and jury will decide. That's the American system. These are all aberrations that we're talking about today.

JOAN WOODWARD: So, if another, God forbid, event would happen, like a 9/11 or similar to a 9/11, you would not advocate Congress pass another fund like that.

KENNETH R. FEINBERG: I don't think you'd ever see it again. I think it was a one-off response to a very unique event. And if Congress ever decided to do something like this again, it should do it in a way that basically treats all victims the same without requiring calculations about economic loss and pain and suffering, subjects better left to the courtroom in one case rather than a broad-based compensation program involving thousands of victims.

JOAN WOODWARD: So, most of these programs you've been involved with are not alternatives to the tort system. But they've really been private donations but don't preclude litigation after these settlements. So these families could have sued in Newtown or Virginia Tech or Boston Marathon. But you have said that most people won't sue after they've received some sort of compensation. Why do you think that is?

KENNETH R. FEINBERG: Well, that's a very, very interesting question. It's being researched right now by the RAND Corporation. RAND is doing a study.

Why do people who receive compensation from these programs as basically a gift--they don't have to sign away any rights at all. They could take the money and hire a lawyer. Why don't they? Why do most people accept the compensation as a gift? But they don't hire a lawyer. And they don't litigate fault.

I suspect the answer is a combination of, if they are treated generously and they are treated with fairness and understanding and empathy, that and the fact that they realize they have to move on--I mean, if you file lawsuits in these cases, you're talking about five or six years of litigation. The 94 people who opted voluntarily out of the 9/11 fund, 3%--97% came into the program.

The 94 people who opted out and decided to sue the airlines and the World Trade Center, they all settled their cases five years later but not until years of depositions and discovery and reminder of that horrible day. And I think people, if they're treated with respect and empathy in all of these programs, they tend to move on and decide not to relitigate and relive all of the horror.

JOAN WOODWARD: Right. Right. Boy, I mean, you emphasize the importance, really, of meeting people and transparency and efficiency and getting money out quickly. These are also really important components in the claim process and the insurance industry. So how critical is that--the importance of people believing in the system is going to treat you fairly.

And, again, this is our bread and butter in terms of--we have claimed people meeting with people who have lost their life and have been severely disabled all the time. And we talk a lot about at our company empathy. But trusting the process, how critical is that?

KENNETH R. FEINBERG: It's the key. And I'm very fortunate for decades. My colleague, Camille Biros, who's featured prominently in the movie, Worth, she has helped design and administer these programs that maximize empathy, speed--very important, speed--efficiency, and certainty. Certainty. You're not rolling the dice in the courtroom.

And those sort of attributes of these programs are critical to success. And if you can try and define expectation-- come into the program. We'll evaluate your claim with simplicity. Within 60 days you'll be compensated. You know how much you're going to receive. There are no curveballs or hidden agendas. That's lessons learned in part--we have learned in part from the insurance industry, in part. And that's critical. Managing expectation is critical.

JOAN WOODWARD: How do our claim professionals and the industry, not just at Travelers--so they're listening to people who had these tragedies in a wildfire or hurricane situation, loss of life, again. They're our best listeners out there. So how do they maintain their own mental health or emotional help when you're trying to help--mental health when you're trying to help someone who's just had this tragedy fall into their families?

KENNETH R. FEINBERG: Well, I have two answers to that. First, in terms of individual insurers, individuals working for the insurance industry, I'm not sure how they maintain their mental health. I rolled into the 9/11 fund or the BP oil spill or the Boston Marathon. We set up the program. I'm done.

Everyday insurers 24/7, 365 a year deal with tragedy and grief. In my case, I found that you had to take a break. If we were processing claims and meeting with victims during the day, we always managed to take a break. Go outside. Walk around the block. See happy little children playing in a playground. Buy an ice cream cone.

And then at night--at night the height of civilization for me--during the day the horrors of civilization. But at night, during 9/11, all of these programs--symphony, chamber music, opera--trying to escape the day's horrors and the days suffering by recognizing on a regular basis the height of civilization. And besides, I always have the nation behind me in all of these programs. If it's the Boston Marathon, it's the citizens of Boston. If it's 9/11, it's the nation. If it's Aurora, Colorado, The Dark Knight movie shootings, the governor of Colorado, then Governor Hickenlooper, basically apolitical and everyone supporting the effort to come to the aid of innocent victims.

JOAN WOODWARD: So, let's switch gears a little bit, Ken, and talk about--walk me through how insurance played a role in each of these cases or the implications of someone having a worker's comp policy, obviously a life insurance policy. Did you take that into consideration or business interruption in the Gulf? A lot of people have business interruption coverage.

So how did that play into what you were deciding to kind of give to these claimants who are coming to you for the fund, the BP oil fund or 9/11 fund? Did you consider the insurance? Did that come into play in your calculations?

KENNETH R. FEINBERG: It rarely comes into play, insurance. It rarely does. Now, sometimes it does.

In the 9/11 fund, the statute creating the fund mandated, required me to offset life insurance. Well, we offset it. But in some cases, thankfully, I had discretion to restore it.

Otherwise, people would opt out. I mean, if I'm going to provide them $3 million and they have $4 million in life insurance under the statute, at least technically they owed me money in the 9/11 fund. So, I took it into account.

Now, in 9/11 also, you may recall this, the Travelers, Liberty Mutual, all of the workers' comp carriers, waved their liens as a patriotic gesture, they waved the liens, so we didn't run into that problem.

But in some of these programs, you have to deal with the carriers. Now, most of these programs, like the gifts, the carriers aren't involved. It's a gift you pay the claimant. They receive the funds.

In other cases, the carrier is watching. And if there are liens, then you try and address the liens and try and discount the liens and make sure that the bulk of the money is in the pocket of the victim. But the carriers who work well on the occasion when it's necessary, most times the carriers aren't in the picture.

JOAN WOODWARD: Ok, I'm going to shift gears a little bit on you. The RAND Center, which is named after you, it talks about catastrophe risk, natural catastrophe risk, and management and mitigation. So, you said the insurance industry needs to get even better at predicting future catastrophes and improving our industry methods to anticipate litigation risk. So, can you expand on that? Or do you want to talk about, how do you envision alternative dispute resolution programs working for a natural catastrophe situation?

KENNETH R. FEINBERG: Bad things happen to good people every day in this country. And there aren't many industries better able to provide predictive skill than the insurance industry. They are the experts.

They're not the only experts. But they are the experts. One thing RAND is doing now is working with the insurance industry to learn more about predictive capacity and what we know and what we don't know.

I mean, I love talking to people who live in San Francisco. And I love to ask them, you're living in San Francisco? There's an earthquake around the corner. The fault line runs through San Francisco.

And you get various answers from people. Life is a roll of the dice no matter what. I mean, you can't live your whole life waiting for the next volcano or the next earthquake or the next hurricane.

In hurricanes in the Gulf, we see time after time after time people living on the Gulf have their homes destroyed in hurricane flood. And they rebuild with the help of the federal Flood Insurance Program. So, you try and minimize risk. The best way in America to minimize risk is insurance. And we have a lot to learn from the insurance industry about predicting risk and protecting against risk.

JOAN WOODWARD: Do you think an alternative dispute resolution program could work in a hurricane or tornado or wildfire situation? Or do you think that we'll never get to more of a mass alternative dispute resolution process?

KENNETH R. FEINBERG: Great question. Now, let me give you an example, specific example. After Hurricane Katrina, two insurance companies, Zurich and Liberty Mutual, came to me.

Ken, we want an alternative dispute resolution program independently administered by you to resolve coverage disputes arising out of Katrina, particularly in New Orleans and its environment. We set up a program after Katrina. And Zurich and Liberty Mutual ended up with, I think, in the aggregate less than 200 lawsuits.

Camille and I, remember this, we thought this is the beginning of a wave of new approaches to coverage: ADR, mediation, arbitration, no litigation. We were wrong. I am perplexed as to why, despite the Katrina success in establishing an ADR program, it didn't catch on.

I don't see that the insurance industry as a whole has adopted the way it might creative ADR mechanisms. And I can't explain the insurance culture. But the Liberty Mutual and the Zurich examples were not copied. They weren't a precedent. They didn't provide a major change in the way that carriers review claims. And I think it was a lost opportunity myself.

JOAN WOODWARD: Ok, well, we're always evolving and testing and learning in the industry. So that's interesting. Let's go to shifting gears again.

Mediation, the current tort system, nuclear verdicts, so all of these are on our minds, especially our agents and brokers out there. What do you think the future is of mediation? And how is the field kind of evolved over the years with some of these cases?

KENNETH R. FEINBERG: Mediation has an important role to play. And I've seen it evolve over the last four decades, where mediation has become, like arbitration, an important part of the dispute resolution process. It will never, ever change the basic historical approach the nation has taken from the time it was founded.

You choose your lawyer. I'll choose my lawyer. Judge and jury will decide.

Yes, I see the importance of mediation. But I recognized an important historical fact. And that is the American legal system, the trial system, the adversary system is not going to change in any major way.

Mediation, arbitration, use it. Use it wisely. It's a good alternative. But for the most part, the American court system, the legal system, is so ingrained in the history and the fabric of the country that I don't think there's much chance of it changing dramatically. I don't see it myself. And that's from somebody who's a big believer in mediation but is the lawyer and who recognizes the historical value and impact of the adversary system in the courtroom.

JOAN WOODWARD: So, is it more difficult for a mediator now to value a case now than the value of a claim that could be unpredictable in certain jurisdictions, where a jury could potentially support a nuclear verdict? So, in other words, are these nuclear verdicts really shaping the value of a case?

KENNETH R. FEINBERG: No, I don't think so. I learned many years ago the best source of information about the true value of a particular case is the insurance industry. And I've cherished that resource in trying to mediate settlements.

Now, don't get me wrong. Social inflation and the nuclear verdict does pose public policy problems today, especially in the mass tort area. In the mass tort area, where I'm heavily involved over the last 20 years, nuclear verdicts and huge verdicts coming from juries have posed a major problem not only for the defendant company and its insurers but in terms of expectation among the body politics.

So, if you get one or two or three verdicts in Monsanto Roundup cases, for example, that serves as a magnet to have a mass tort explode with thousands of claimants claiming injury due to Roundup exposure. That happens. And I think the American legal system, if it has one drawback, it is its inability right now to adequately and efficiently deal with mass tort litigation. That's an exception to my general rule relying on the American legal system.

JOAN WOODWARD: Got it. So, what do you make or what do you think of all these hedge funds now investing in these plaintiff cases? We're seeing much more of it. It's a growing area of hedge fund involvement to fund the plaintiff cases. And what is your view of that?

KENNETH R. FEINBERG: Oh, I don't like it. You're providing economic fuel for additional litigation as if we don't have enough. Having said that, be careful about a rule you cannot do it.

Government will bar it. You're prohibited. I mean, it's a slippery slope when investors, if they follow the rules and want to take the risk--they want to invest. There are certain issues about freedom and liberty and the right to choose your investment vehicle. I'm inclined to discourage it without prohibiting it.

JOAN WOODWARD: OK. Before we get to audience questions, Ken, I want to remind our listeners, watchers that we have a few copies of Ken's book left. We've sold out about 1,000. So, we have a few more.

If you haven't got your copy of your book, please let us know. We'll put it in the chat feature how to get it. Or just send us an email. So happy to hand out more of those because it really is fascinating.

So, Ken, a couple of personal questions for you. And then we're going to get to the audience. What have you learned about human nature in the course of all of your work? Give us some insights.

We're all sitting at home for two years here on the Zoom. And we're all headed back to the office now. And so, in the insurance industry, this is a people business.

We love our network. We love our agents and brokers. We love our claim reps going out and settling all these cases for us in the field. So, what have you learned to help our insurance audience about human nature in all of the things you've done in your career?

KENNETH R. FEINBERG: Human nature is as diverse and mystical as the number of people that are involved in these programs. If you think that you can in advance sort of define the human nature of a claimant, an insurance claim or what I do, you're dreaming. People have all sorts of different approaches, characters, character habits, personality traits. Don't try and determine your program by focusing on the hypothetical perfect person.

I've found that when people come to see me about compensation, I've found three important lessons. First, they never come to me to talk about money. Very rare. They come to me to talk about validating the memory of a lost loved one.

Mr. Feinberg, I lost my wife in the World Trade Center on 9/11. She was an angel. We were married for 25 years. And during this private session now, I want to show you a video of our wedding 25 years ago. What an angel.

Second, they come to vent about life's unfairness. Mr. Feinberg, I lost my husband at the World Trade Center. Why him? He was a great husband, a great father. Don't tell me there's a God. There is no God that could allow my husband to die in the World Trade Center without even the chance to say goodbye.

The other thing I've learned about compensation, everyone counts other people's money. It's a human trait. Mr. Feinberg, you're giving me $3 million in the 9/11 fund. But you gave my next-door neighbor $4 million.

What do you have against my wife who died? You never even met her. And already you're tarnishing her memory by giving $1 million less than my next-door neighbor. What do you have against her? And you try and explain about economic loss and work-related comp--that gets you nowhere. So, don't try and predict what people in grief--how they're going to react when they come to see you to talk about a lost loved one.

JOAN WOODWARD: Wow, that is really--I'm sure you went home many nights listening to lots and lots of opera and other--

KENNETH R. FEINBERG: Not enough. Not enough.

JOAN WOODWARD: OK, so audience questions. Here we go. Here's your first one. You've been involved in the evaluation and distribution of several significant mass tort claims. As a result of these experiences, what advice would your guests have for our families working on estate planning or dividing estates whereby the heirs have substantially different needs both economically and non-economically? Very thoughtful question about dividing up estates.

KENNETH R. FEINBERG: Do it now. Don't wait. Work it out in full transparency. Get everybody around the table. If you need a mediator, get a mediator. But don't wait until it's too late to try and resolve these differences in estate planning.

In the 9/11 fund, two-thirds of all the victims in the World Trade Center died without a Will. Big mistake. When you're young, you think you're a master of the universe. You don't need a Will.

Have a Will. Prepare one. Put it in the drawer. You can always modify it. But my advice to anyone who asks, and I get asked this frequently, do it now. Don't wait until it's too late, when the testator is no longer around to help resolve disputes.

JOAN WOODWARD: OK. Good answer. This is another question for my audience. In terms of negotiating skills, what negotiation strategies work well for you in these highly sensitive situations? Or I guess some of them weren't negotiations. You would just decide. Then you would have to explain your decision. But did you negotiate, for example, with that shrimp fishermen in New Orleans saying here's my balance sheet, here's what I did last year? Did you want them to feel like there was a negotiation, that you were negotiating with them so they would feel like they a part of the decision process?

KENNETH R. FEINBERG: Whether you have a fixed program, like BP oil spill, where you have a protocol with facts that are non-negotiable, or whether you're negotiating the settlement of an individual case, put yourself in the shoes of your opponent. Empathy. Hear him out.

From their perspective, what can you add to the discussion that will help get to yes? And I've found that putting yourself in the other person's shoes, A, making sure that when you negotiate or even implement an administrative scheme, you master the record. You want competence. You want to know more than your negotiating adversary. You want to know every aspect of it.

And also, there's no such thing, really, to me as negotiating under a tight time frame. Let it play out. Demonstrate that you're here as long as necessary to get it done. You won't be rushed. You want to get it done the right way. And if you use those suggestions along with others, you're on the way to being a pretty skilled negotiator.

JOAN WOODWARD: Shifting gears again, another audience question, did the Netflix movie, Worth, which was exceptional, do an accurate job of depicting the challenges you faced?

KENNETH R. FEINBERG: That's a great question. That movie had a gestation period of 10 years. I sold the book rights to the 9/11 What is Life Worth? in about 2008. The movie did not actually get filmed, produced, until 2019.

I thought you would never be able to produce a film that could accurately display what we went through those 33 months in administering the 9/11 fund. But the film did a pretty good job. Now, there's a lot of dramatic license. I don't want to give away the ending or anything like that.

There is a fair amount of dramatic license. But Michael Keaton played me. Amy Ryan played my colleague Camille Biros. Stanley Tucci played a victim, a survivor, lost his wife.

And they did a pretty good job, much to my surprise, of conveying the overall atmosphere. And I remember my children-- they're all grown. But they did say, dad, Michael Keaton did a pretty good job of your accent and your mannerisms.

But, frankly, he's a great actor. But he ought to stick with Batman and Beetlejuice because he didn't really catch all of your idiosyncrasies. But overall, I think the movie was a pretty good job. And I'm glad that it's received a fairly extensive critical and public acclaim.

JOAN WOODWARD: Yes, I really enjoyed it. I have to say I watched it three times because it was just really-

KENNETH R. FEINBERG: Three times?

JOAN WOODWARD: Three times. I only read the book once.

KENNETH R. FEINBERG: You ought to come to my house sometime. We have five TVs. And all you can watch 24/7 is Worth. You can't get any other station in my house.

JOAN WOODWARD: OK. Another question here. Can you discuss--you talked a little bit about this. But can you discuss the overlap in nuclear verdicts for single plaintiffs, the work you do in anticipated future trends?

KENNETH R. FEINBERG: Well, nuclear verdicts are aberrations. They get a lot of play. But nuclear verdicts, contrary to what you may think, are not commonplace. They don't move the needle very much except, again, in the mass tort area, where they can have a real future impact on the filing rate of claims, et cetera.

I find that most litigation that might result in nuclear verdicts get settled. They get settled because the adversary is worried about the risk of exploding litigation docket. So, they resolved those claims.

There are some, I acknowledge, that are problematic. But I don't believe that the future in our country is going to be filled with more and more nuclear verdicts and more and more mass tort litigation. Frankly, the courts have put a governor on the idea of these nuclear verdicts.

Certainly, the courts, especially the Supreme Court, look with great skepticism on class action litigation. And I think that trend means that you won't see some vast difference in the diversity or the number or the volume of nuclear verdicts. I don't think that is likely.

Maybe in the personal injury area, asbestos, or now talc, you may see some growing interest. But overall, we're a large country with a main litigation docket. And nuclear verdicts aren't part of them.

JOAN WOODWARD: And just to follow up on that, we have to talk one more time about social inflation. So with general inflation going up, they were at 7.5% of general inflation going up. Do you expect social inflation to kind of follow suit, and we have a lot more social inflation built into the system because potentially over the last couple of years what's happened with the pandemic? Or do you feel like social inflation potentially could fall off a bit?

KENNETH R. FEINBERG: Well, potentially, you throw that word in, sure. Now, here again, RAND is looking at this. What RAND Research Institute--what does the Bureau of Labor Statistics say? What does the Bureau of the Census say about trends in litigation settlements, valuation?

The insurance industry is pretty adept at mastering the data. And what a lot of people don't realize is that if you go to some of these public agencies, like the Bureau of Labor Statistics, we used that like the Bible during 9/11, getting actuarial tables to help us calculate economic loss. And the Bureau of the Census back in 2000, I think it's probably the same today, provided us some very valuable data in helping corroborate the credibility of our analysis and our calculations in awards.

So, there is data out there that can help answer your question about social inflation. What are the trends, not the aberration but the overall trend of litigation? There is some important research going on right now at RAND and elsewhere in these areas.

JOAN WOODWARD: Wonderful. Well, Ken, I cannot thank you enough. I thoroughly enjoyed the last hour with you. I think you're a wealth of knowledge.

You're a true national treasure, I believe, in your public service and all the pro bono work you've done for so many victims and their families. So, thank you very much for your service there. And, of course, thank you for today. It's been a real treat and an honor to chat with you.

KENNETH R. FEINBERG: Well, thank you and also a debt of gratitude that I want to express not only to you but to the Travelers. I must say this is a very civilized thing you're doing, setting up these public policy forums to address various timely issues. And for what Travelers and the Foundation are doing, the Institute to advance public knowledge in some of these areas, you have my deep thanks and appreciation.

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Text, Wednesdays With Woodward Webinar Series. Upcoming Webinars: March 2 - Power Up: Growth Opportunities in Renewable Energy With Arevon’s Justin Johnson, Rosendin Renewable Energy Group’s Duncan Frederick and Travelers’ Global Practice Leader for Renewable Energy Eileen Kauffman. March 16 – Global Hot Spots and Geopolitical Risks With Former U.S. Secretary Of Defense Chuck Hagel. March 30 – Ready to Take Over? Driver Distraction in the Age of Automation With Dr. Ian Regan and Dr. Alexandra Mueller from the Insurance Institute for Highway Safety. Visit us: Travelers Institute dot org.

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JOAN WOODWARD: Well, thank you, Ken. Speaking of which, I'm going to let our viewers know the next upcoming one. So on March 2nd next week, we're going to talk about alternative energy--wind, solar, and other alternatives and the insurability of those and the growth of those that we're seeing. And we're going to talk to some true experts in that space internally and externally.

And then, Ken, actually, on March 16th, I'm going to interview your long-time friend former Secretary of Defense Chuck Hagel. As we all know, he was a Senator, a Republican Senator, from Nebraska for a number of years when I worked on Capitol Hill and then he took a job in the Obama administration, which was really a truly bipartisan, nonpartisan thing for him to share his expertise with us then.

So, he'll take us around the world and talk about all the global hot spots and geopolitical risks and what they mean for your business. These are affecting all of our businesses and all of our lives. What's going on in the world?

And then on March 30th, we're going to talk about highway risk and driver safety with the Insurance Institute for Highway Safety. So, we'll talk about road risk. So, register for those programs. And then also I want to say in June we're going to have a special program on nuclear verdicts. So, if you're interested in that, like we talked about today, we'll let you know later this summer on that.

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Watch Replays: Travelers Institute dot org. Connect: LinkedIn, Joan Kois Woodward. Take Our Survey: Link in chat. hashtag WednesdayswithWoodward

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So please take a minute to do our surveys. We appreciate your feedback. And, again, Ken, thank you so much. I'm incredibly grateful to you. And be safe, my friends. And, hopefully, we'll all see each other in person soon.

KENNETH R. FEINBERG: I hope so. Thanks very, very much. Bye.

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