Sickened September 11 workers get revised settlement

A crane lifts rubble from the ruins of the World Trade Center in New York, October 12, 2001.

NEW YORK (Reuters) - Attorneys for thousands of workers who suffered health problems stemming from the September 11, 2001, attack on the World Trade Center reached a revised $712 million settlement with New York City on Thursday.

In March a federal judge rejected an initial settlement of up to $657.5 million, saying it needed to be more transparent and that too much of the money -- about one third -- would be spent on lawyers' fees.

Nearly 10,000 firefighters, police, contractors and others who worked at "Ground Zero" in the ruins of the World Trade Center sued the city and its contractors for claims of injuries associated with their rescue and clean-up work.

The settlement will be drawn from a federally financed insurance fund -- the WTC Captive Insurance Company -- created in 2004 with a $1 billion grant from the Federal Emergency Management Agency.

U.S. District Judge Alvin Hellerstein signed the order on Thursday and said he was happy with the revisions. "It's not perfect, but it's very, very good," he said.

The deal requires the participation of 95 percent of the plaintiffs, who have 90 days to decide.

"We believe that a debt was incurred on September 11 and this settlement goes a long way toward paying this debt," said Paul Napoli, an attorney representing the majority of the workers.

The plaintiffs' lawyers have capped their fees at 25 percent, reducing their previous cut by more than $50 million. The WTC Captive Insurance Company has agreed to pay up to an additional $55 million to the workers as part of the revised settlement.

New York Mayor Michael Bloomberg said in a statement the decision was "a fair settlement of a difficult and complex case that will allow first responders and workers to be fairly compensated for injuries suffered following their work at Ground Zero."

The deal allows for larger individual payouts and people receiving workers' compensation for their injuries will now continue to receive assistance. Victims suffering from severe asthma and cancers will get the highest amounts, up to $1 million.

Joseph Lutrario, 43, a former New York City police officer who was injured in the attacks on the World Trade Center, said he was happy that a settlement had finally been reached.

He was trapped in the rubble of one of the World Trade Center towers and suffered a broken shoulder. He later developed polyps in his stomach and esophagus, and post-traumatic stress disorder that forced him into early retirement.

"This is good news now, but I'm not sure what happens five, 10 years down the line if I get even sicker," he said.

(Editing by Michelle Nichols and Xavier Briand)