YOUR FINANCIAL EXPOSURE IS VERY REAL &
THE CASE THAT PROVES IT IS RECENT !

In October 2005, a six-member jury in New York State Supreme Court found that the Port Authority of New York and New Jersey did not heed warnings that the World Trade Center underground garage was vulnerable to a terrorist attack and should be closed to public parking.  The jury found that the agency had not properly protected its underground public parking garage, where terrorists blew up a rental van loaded with explosives on Feb. 26, 1993. The Manhattan jury said that this failure was "a substantial factor" in allowing the bombing to occur. The bombing killed six people and injured 1,000.  A motion to dismiss based on sovereign immunity was also denied by the court.

The 2005 jury apportioned more than half the blame to the Port Authority (68%)  The terrorists were apportioned only 32% of the total liability. 

Under New York State law, once a defendant is more than 50 percent at fault, he/she/it can be held fully financially liable.  The Port Authority will have to pay for all of the hundreds of millions in third party claims.

Unlike the majority of the financial risks organizations
face today, liability for a terrorist act — even partial liability
— can threaten the entire enterprise

On April 29, 2008, the appeal process denied all the Port Authority's post-trial motions, leaving the 2005 verdict intact.  A five-judge panel of the state Supreme Court unanimously agreed with a lower court judge who also refused to set aside the jury's verdict that the Port Authority of New York and New Jersey was negligent and more than 50 percent liable.

The appeals court said what the jury decided was that "the acts of these terrorists, even while obviously odious in the extreme, were not a cause for the easy absolution of this defendant from its civil obligations." 

The NY Supreme Court upheld the verdict by finding that “notice” of potential terrorist attacks was the appropriate standard to apply to facility owners and/or operators. The Court agreed that “notice” occurs when a defendant knew or “should have known” that a terrorist attack was possible. The Court also determined that “reasonable” mitigation steps may now include those that may have previously been considered “burdensome”.

The “should have known” standard and “reasonable” mitigation steps has forever changed the liability landscape in a terrorism related lawsuit. In the post 9/11 world, virtually any terrorist attack, electronic or otherwise, will surely be viewed by a jury as a “should have known” event.

In addition to the horrific personal tragedies, more than $35 billion in insured losses, and incalculable uninsured losses and overall economic impact, the 9/11 attacks brought a profound change in our awareness of terrorism risks and the expectations in dealing with such.

As evidenced in the Port Authority case, it is now much more likely that juries will view any future terrorist acts as "reasonably foreseeable". 

Victims will attempt to recover from any entity seen as potentially negligent in preventing or mitigating the attack. All your related security and anti-terrorism products, services, assessments, studies, analysis, equipment, engineering, technologies, manufacturing, research, development, testing, policies, protocol, decisions, procedures, facilities and infrastructure will be intensely scrutinized.  Whether you supply to others, use or do it yourself, the fact that a terrorist event actually took place at all must mean something did not work, was missing or was inadequate. Regardless, it would be very hard to convince a jury otherwise.

Without SAFETY Act protection, you will become a prime plaintiff  "deep pocket" and soft target. Their strategy will be to "plead around"  SAFETY Act by not naming a protected entity, product or service in the suit.

You may find yourself on the top of the "blame" list regardless of how minor your actual involvement may have been.

PANYNJ CASE UPDATES
September 2011

June 1, 2011- New York's top court will hear the appeal of claims against the Port Authority of New York and New Jersey (PANYNJ) for the 1993 terrorist bombing of the World Trade Center.

In lawsuits citing garage security concerns since 1984, a jury found the PANYNJ, who owned the trade center, negligent for failing to maintain a safe premises and 68 percent at fault.  A mid-level court upheld the verdict, rejecting the Port Authority's claim of governmental immunity.

In this new June 2011 appeal, the Port Authority's argued:

In denying it immunity, "The courts disregarded the clear mandates of this Court shielding discretionary governmental decisions from liability and have allowed, even encouraged, the use of tort law to second-guess these considered policy choices."

Contending it did not breach its proprietary duty. It says, "Earlier premises liability cases established that private landlords must take only 'minimal measures' to prevent foreseeable criminal intrusions. The Port Authority's counter terrorism measures easily surpassed that standard."

Regarding its share of liability, it says, "Holding the Port Authority more than twice as culpable as the actual terrorists is per se unreasonable and undermines confidence in our system of justice.”

PANYNJ NEW CASE UPDATE
June 2011

June 24, 2011- United States Court of Appeals allows 9/11 suit against Port Authority of New York New and Jersey

The US Court of Appeals for the Second Circuit allowed Con Edison, an electrical company that leased property from the Port Authority of New York and New Jersey (PANYNJ) in the World Trade Center (WTC), to sue PANYNJ for negligence in construction and design, and breach of contract after their electrical substation was destroyed in the 2001 WTC terror attacks.

This is the second terrorism related lawsuit against PANYNJ, the first being for the 1993 terror attacks as cited above.

New York Port Authority not liable in 1993 World Trade Center bombing 

September 23, 2011 - 11:35am 

NEW YORK—The Port Authority of New York and New Jersey cannot be held liable for failing to deter the 1993 bombing of the World Trade Center, the state's highest court has ruled. 

Overturning two decisions by lower courts, the New York Court of Appeals ruled 4-3 this week that the bi-state transportation agency is immune from liability tied to its efforts to provide security for the complex because it acted as an agent of the government. 

“Governmental entities cannot be expected to be absolute, infallible guarantors of public safety,” Judge Theodore Jones Jr. wrote for the majority. The Port Authority's police patrol of the World Trade Center, which it owns, was used to service all public and private visitors to the complex, and not—as lower courts had ruled—strictly a landlord protecting its property, according to the appeals court decision. 

Laws back exercise of discretion 

Federal laws protect governmental agencies from certain tort claims and are “intended to afford deference to the exercise of discretion by the officials of municipalities and governmental entities, especially with respect to security measures and the deployment of limited police resources,” Judge Jones wrote. 

In 2005, a Manhattan jury determined that the Port Authority was 68% liable for the attack, a decision upheld by a lower appellate court in 2008. 

Six people were killed and nearly 1,000 were injured when terrorists detonated a car bomb on Feb. 28, 1993, in a parking garage beneath Tower 1 of the trade center complex. Both towers were closed for more than a month, barring hundreds of companies from returning to their offices. 

A year after the attack, 648 plaintiffs—largely those injured in the attack and WTC tenants unable to access their offices—filed more than 170 lawsuits against the Port Authority, alleging that the agency ignored previous reports citing security deficiencies at the WTC. While a majority of those suits were settled out of court, several personal injury and business interruption claims still are outstanding. 

“While we are still reviewing the decision, we are pleased that the court has accepted the Port Authority's longstanding position on this matter recognizing its continuing governmental immunity,” a spokesman for the Port Authority said. “(This) ruling brings us closer to a final resolution of this emotional process.”

Our Core Services:

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• Provide Updates & DHS Feedback

• Negotiate with DHS, Lawyers, Brokers and/or Insurers as Needed

• Evaluate Existing Approvals for Issues & Conflicts

• Review Insurance Program for Conflicts, Compliance, Adequacy and Any Potential Savings

• Review Contracts & Agreements for Conflicts, Issues, Compliance and Modifications Needed

• Assist in Upgrading Existing SAFETY Act Approvals

• Help You Use SAFETY Act to Better Market Approved Products or Services

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P.O. Box 4028
Barrington, IL 60011-4028

 

 

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We look forward to assisting you in creating customized solutions critical to your organization and key in helping protect the public.

We will help you:

Protect Your Organization from enterprise threatening liability that will follow a terrorist event alleged to involve your organization's facilities or products in any way

Protect your bottom line from suits stemming from the use, manufacture, distribution, provision or deployment of anti-terrorism or terrorism response or mitigation related products, advice, aid, procedures, technologies or other services

Save Money on both new and existing insurance programs, the ongoing cost of risk as well as the overall SAFETY Act process

Increase Your Revenue by using SAFETY Act approval to help market your products, advice, facilities, technologies or services including cyber or network related

Thoroughly understand the SAFETY Act as well as the regulations that implement it

Thoroughly understand the SAFETY Act application process

Evaluate the Act's benefit to your organization, insurance,  products, suppliers, vendors and customers

Determine if SAFETY Act
protection can apply to a given product, facility, technology, procedure and/or service

Describe and review the Act with your risk management, legal, upper management, finance, engineering, and marketing groups as needed 

Evaluate the time demands, costs and difficulty of the application process for your unique exposures

Manage the entire application process through completion

Evaluate insurance programs for adequacy in coverage, limits, protecting your liability cap savings, insurer and SAFETY Act compliance

Evaluate contracts and other agreements for conflicts, issues adequacy as well as insurer and SAFETY Act compliance

Provide options for minimizing cost of insurance and risk while maximizing coverages

Arrange for outside experts as appropriate for your specific needs including experts in technical, legal, insurance and political affairs as well as physical and financial asset, business income and supply chain protection

Monitor the SAFETY Act status of your suppliers, vendors, subcontractors and customers

Negotiate with the DHS, insurance brokers, insurers and/or lawyers if potential problems, conflicts, limitations, potential savings or enhancement possibilities exist

Create a standardized process to coordinate and manage all SAFETY Act related activities for existing, planned or future exposures as well as third party approvals (i.e. your vendors)

Post approval support including any changes in your insurance, the insurance market, insurance costs; changes in your approved products or services; periodic review of compliance and other services you deem necessary

Advise on other terrorism related financial protection strategies including contractual protection review, FARs, Public Law 85-804, Government Contractor Defense - "Boyle", captive utilization and/or formation, conventional and non-conventional terrorism insurance coverages, TRIA applicability and access, etc.