German Insurer’s Attempt Denied To Gain Subrogation Rights Stemming From WTC Attacks

Bonus points for anyone who can say the name of this case three times really fast. In Grosshandels-Und Lagerei-Berufsgenossenschaft v. World Trade Center Properties, LLC, 2006 WL 52716 (2d Cir. January 11, 2006), the court denied an attempt by a German “social insurer” to seek subrogation for money it had paid out to its insureds, who were killed in the September 11, 2001 terrorist attacks.
The Second Circuit held that the Victim Compensation Fund (VCF) created by the federal government was not liable for the insurer’s subrogated claim. The VCF was created to erase the potential tort liability of a wide range of possible tortfeasors, and the acceptance of money from the fund extinguished all claims, including supposed subrogation rights. The VCF paid the victims’ families after deducting from their claim the amount of insurance proceeds paid by the German insurer. An interesting sidenote to this case is that the “social insurance” mentioned is a state-sponsored insurance fund in Germany that provides German citizens not only with life insurance but apparently disability insurance as well.

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