The DC-10 Crash Sweepstakes

Air disasters make for big cases--and big rewards

When a DC-10 falls out of a clear blue sky and kills 275 people, as American Flight 191 did in Chicago last May, there is no doubt that the victims' families will be financially compensated for their loss. The multimillion-dollar question is how much. By last week, American Airlines and McDonnell Douglas, the manufacturers of the DC-10, had offered $30 million to the families of 112 victims if they would settle instead of go to court, and more settlement offers are forthcoming. What the airline and the air plane builder are trying to avoid is the kind of protracted legal battle that can cost them much more.

It invariably begins with a race among some unscrupulous lawyers to sign up the next of kin. Soliciting clients, or "ambulance chasing," can cost a lawyer his license. But for some the temptation of a multimillion-dollar air crash is too much.

One practice is to hire "investigators" to interview the grieving relatives and drop the name of a "highly recommended" attorney. After crashes abroad, American lawyers have been known to travel to the villages where the victims lived, rent a hall and then invite the heirs to come and listen to a talk about "their rights." The DC-10 crash prompted a San Francisco law firm to place an ad in the Los Angeles Times headlined, in mortuary gothic letters, TO THOSE WHO NEED TO KNOW ABOUT AN AVIATION DISASTER. The ad invited readers to call the firm collect for further counsel. (Twelve readers responded; so far none have signed up.) Is the ad ethical? Says California State Bar President David Levy: "The line between advertising and solicitation is pretty fine. They're pretty clever."

Insurers for the airlines are understandably eager to head off the lawyers by getting to the next of kin first and offering them a quick settlement. A week after the Flight 191 crash, the insurer for American Airlines sent a three-page letter to the relatives of all the passengers. Extending his "sincere condolences" and detailing the insurers' plans to pay funeral expenses. Robert Alpert, vice president of the United States Aviation Underwriters, offered to settle any damage claims. Then came some pointed advice. "It is also our hope," wrote Alpert, "that you ultimately retain as much of the compensation as is properly due you without unnecessary diversion of large amounts to legal expenses." "Outrageous was the response from Lee Kreindler, 55, a highly respected New York City lawyer who is one of a small group that specializes in aviation accident law. Alpert had no business "butting in" on the lawyer-client relationship, said Kreindler. He added: "I know of no case where a claimant benefited by dealing directly with a liability insurance company." In the 1977 collision between two Boeing 747s on the ground at Tenerife in the Canary Islands, for instance, the insurance company tried to settle quickly with Kreindler's 41 clients for $58,000 apiece; after two years, Kreindler managed to win settlements of over $650,000 for some claimants.

Kreindler defends his high fees (17 1/2% of the award), pointing out that air crash suits are complex and time consuming. In the Chicago air crash case, he will have to show how much money his clients (so far, the relatives of 16 victims) need to be compensated for their loss, based on the projected earning power of the victim, age, dependence on and relationship to the claimant. He must also prove that American or McDonnell Douglas or both were at fault. To be sure, the airline and manufacturer have offered not to contest their liability and to settle -- but only if the victims' families agree not to press for punitive damages. Designed to deter harmful acts that are willful or wanton, punitive damages are added to however much money it takes to compensate the victims' families. To prove to a jury, as Kreindler puts it, that American and McDonnell Douglas "knew it was only a matter of time before the airplane fell apart," Kreindler will have to amass mountains of persuasive evidence.

Chicago Attorney John Kennelly, 62, an air crash expert who has so far filed suits on behalf of the relatives of 22 victims in the Chicago crash, charges that the insurers traditionally stretch out the litigation to hold on for as long as possible to the large sums of money they will inevitably have to pay out. The interest on the money alone is worth millions; Kennelly argues that that interest should be added to the final award.

To provide quick, indisputable and fair compensation for victims' families in the future, Kennelly suggests a system of no-fault insurance. Uniform guidelines would be established that would specify the settlement for each heir, weighing the same factors -- victim's age, income and so forth -- that a court now considers before making awards. Kennelly acknowledges at least one consequence of hi proposal: "If they standardize awards, it does away with my job."

That will not happen any time soon, and the Chicago crash is shaping up as the most expensive aviation liability case to date. The record for damages is now held by the crash in 1974 of a Turkish Air lines DC-10 near Paris, which has so far cost its insurers some $68 million. But because of inflation and because the passengers were Americans with higher earning potential, the Chicago crash could cost as much as $200 million in claims, which may take several years to settle. Says one Los Angeles attorney: "I call it the megabucks of Chicago." -

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