The $4.03 billion settlement intended to compensate victims of the devastating Maui wildfires is poised for distribution, yet many survivors harbour little hope it will fully cover their profound losses. Leslie Clark, 62, whose home near Front Street in Lahaina was destroyed in the August 2023 inferno, expressed weary resignation, stating that worrying about factors beyond her control is not good for health.
While settlement cheques could begin flowing as early as June, the precise amount each victim will receive remains uncertain. A team of claims administrators is tasked with allocating funds across ten complex categories, including injury or loss of home. However, a substantial portion of the payout is already earmarked for legal fees and insurers. Attorneys are seeking 25 per cent of their clients’ awards, a request that has met with scepticism from Maui Circuit Court Judge Peter Cahill.
Insurance companies are set to claim 10 per cent of settlements from insured homeowners. This means that for some victims, up to a third of their settlement could be absorbed by legal fees and insurers. A further concern looms: without congressional action to reinstate an expired federal income tax exemption for wildfire settlement money, the federal government could claim as much as 37 per cent from survivors.
Sherry Peterson, a fellow with United Policyholders, an insurance consumer advocacy organisation, contends there is simply insufficient money to adequately compensate the 21,750 plaintiffs filing 94,816 unique claims. She observed that the most frequent claims involved individuals who were displaced or had to escape the burn zone, concluding that none of them are going to be made whole by this settlement.
Judge Cahill has taken a firm stance on legal fees, favouring a common benefit fund to ensure lawyers who performed the bulk of the work are fairly compensated, rather than a blanket 25 per cent fee. During a March hearing, he questioned whether victims were aware of the lawyers’ bid for approximately $1 billion, highlighting the delay in payments nearly two years after the settlement was finalised.
