Terrorist attacks in developed countries always attract widespread media attention. The media focus on identifying the terrorists who perpetrated the attacks and the horrors that were inflicted on victims and their families. Little attention, however, is paid to the monetary implications of these attacks. With increasing frequency, civil courts are now being asked to decide who should be held responsible for these losses. Insurance rates, coverage terms, private party liability and even a nation's foreign policy may all be implicated by the manner in which these claims are resolved.
Insurers have paid billions of dollars in covered losses of life and health, property damage and business interruption. Victims and their families, along with property and business owners have also sued private parties to recover uninsured losses. Many insurers have also brought their own subrogation claims to recoup the monies they paid out for first-party coverage losses. These claims assert that private parties should be held responsible for not preventing an attack and/or that a governmental entity can be held liable for "supporting" it. To resolve these claims, courts must wrestle with complex issues of private party duty and sovereign immunity.
Victims and their families want justice. Commercial plaintiffs simply want to recoup their losses. Irrespective of their motivation or the nature of their claim, both groups raise a difficult legal and social question: “Who should be held liable for preventing such attacks?”
Until fairly recently, most legal systems did not recognize any private or governmental responsibility for the acts of third-party criminal or terrorist actors. Private parties were shielded from liability by causation- and duty-based defenses, while governmental actors were protected by the concept of sovereign immunity. These principles remain as viable defenses, but the law has been in a state of flux as the frequency of terrorist attacks and the scale of damages have increased markedly. From this writer's perspective, most claims of common-law negligence against private parties for failing to prevent acts of terrorism are supported by neither logic nor law.
The vast majority of terrorist attacks are directed against a nation's culture, way of life, beliefs and foreign policy, not a private party's way of doing business. Nonetheless, the claims that are asserted foist upon private parties the duty to prevent attacks that a nation or city's military, police and intelligence entities have been unable to prevent. Claimants nonetheless say that they only are looking for liability to be recognized if the defendant failed to act "reasonably." But what is a "reasonable" response by a private party to provide a defense to the wide range of possible terrorist acts? With 20/20 hindsight, claimants may point to one or two measures that might have had some effect, but the range of measures that one might have to apply prospectively cannot be limited nor defined by a lawyer's 20/20 vision.
Insofar as governmental immunity is concerned, foreign governments have been sued with increasing frequency for allegedly "supporting" terrorism. Such claims are generally premised on legislation allowing foreign governments to be sued if they are designated as "state sponsors of terrorism." However, recent legislation enacted in the United States (Justice Against Sponsors of Terrorism Act, or JASTA), allows any government found to have "supported" a terrorist actor to be held civilly liable. The legislation was specifically directed against the government of Saudi Arabia with respect to its alleged financial payments to al Qaeda prior to the 9/11 attacks. After its enactment, hundreds of billions of dollars in claims were asserted by victims and their families as well as numerous business and insurance interests. Those claims are now pending.
Other nations may soon enact similar legislation. Many commentators, including former President Obama, have discussed the negative consequences that these types of claims may have. The United States, for instance, could face liability for harm caused by anti-government groups that it has supported as part of its foreign policy. One must ask whether the civil courts are the best forum for addressing such issues.
Tragic and shocking as the September 11, 2001, attacks were, the lessons drawn from them have not been able to prevent other types of terrorist attacks. Terrorists are proving to be highly adaptable and able to evade government security measures. The number of terror groups around the world and their ability to organize followers sadly but not surprisingly are generating more attacks. A look at the Global Terrorism Database, maintained by the National Consortium for the Study of Terrorism and Responses to Terrorism at the University of Maryland, provides insight into the astonishing frequency of attacks. In calendar-year 2015, the most recent year in the database, the GTD lists 14,806 incidents. That equates to more than 40 terrorist incidents every day, somewhere in the world.
The United States has witnessed other deadly terrorist incidents since 9/11. These include:
- A December 2015 shooting at a San Bernardino, Calif., social-services agency. A married couple armed with semiautomatic rifles, handguns and pipe bombs took the lives of 14 victims and injured 21 more before the husband and wife were killed in a shootout with police.
- A January 2016 shooting at a nightclub in Orlando, Fla. It was the deadliest terror attack on U.S. soil since 9/11, with 49 killed and 53 injured by a lone gunman.
The likelihood is that more incidents will occur in the United States, along with negligence claims against private parties. The duty of care owed to victims will again be a focal point of plaintiffs’ arguments, as well as a means of defense. In future posts, we will discuss other aspects of defending against liability claims relating to terrorism. In the interim, it is relevant to consider that the monetary implication of a terrorist attack is a point well understood by terrorists. Osama bin Laden frequently spoke about this issue and commented that while the 9/11 attacks cost al Qaeda $500,000, the economic losses to the United States economy was in the range of $500 million to $1 trillion. At the time he made these comments, he hadn't included the costs that accompany litigation. Future terrorists might.