Judge in NY orders more talks on 9/11 deal

Firefighters make their way over the ruins through clouds of smoke as work continues at ground zero in New York, one month after the attacks on the World Trade Center in this October 11, 2001 file photo.

NEW YORK (Reuters) - A U.S. federal judge on Friday delayed a $657.5 million settlement for workers who suffered health problems after the September 11, 2001, attacks, saying the process must be transparent and lawyers fees should not be drawn from the funds.

U.S. District Judge Alvin Hellerstein said workers injured should know the approximate value of the cash award they might get before having to decide whether to participate in the settlement. The deal requires the participation of 95 percent of the roughly 10,000 plaintiffs.

The plaintiffs include firefighters, police, contractors and others who worked at "Ground Zero" in the ruins of the World Trade Center.

The judge said the settlement set too much money aside for future payments and more of it should be given out immediately. He said he would preside over meetings with workers involved in the settlement.

Hellerstein also said fees for lawyers representing the workers should not be drawn from the $1 billion fund set aside by the federal government to help cover the claims but should be paid by the federally financed WTC Captive Insurance Company, created in 2004 to insure New York City and some contractors.

The fund was set up after the attacks when New York City was unable to find private insurance to cover claims stemming from the clean-up effort.

"I have in mind that people are tired and what I'm going to say is going to suggest some delay," Hellerstein said. "In my mind this settlement is not enough."

Christine LaSala, president of WTC Captive Insurance Company, said she was disappointed by the ruling.

"I am very disappointed that the judge has now made it more difficult, if not impossible, for the people bringing these claims to obtain compensation and a settlement," LaSala said in a statement.

That sentiment was echoed by the city's top lawyer, Michael Cardozo, who said Hellerstein's reaction to the settlement "will make it extremely difficult to resolve these cases."

Hellerstein issued his preliminary ruling after hearing emotional testimony from first responders who described how their health had suffered since 2001.

While some of those testifying said they would sign onto the settlement, others said they were not sure.

"This courtroom is filled because we ran down to get ... your loved ones out of there," said John Walcott, 45, a former detective who said he had leukemia. "Every election ... everybody mentions 9/11, 9/11. Not too many people mention the people who went down there."

A spokeswoman for the lawyers representing the workers declined to comment.

(Reporting by Edith Honan, Editing by Bill Trott)