Southern California Edison hasn’t accepted responsibility for igniting the Eaton fire, but it is now offering each victim who lost their home hundreds of thousands of dollars, according to a draft of its planned compensation program.
The owner of a 1,500-square-foot home destroyed in the wildfire, given as an example in the company’s draft, would receive $900,000 to rebuild. In addition, the utility is offering that owner an additional $200,000 for agreeing to settle their claim directly with Edison.
The family of each destroyed home would also get compensation for pain and suffering — $100,000 for each adult and $50,000 for each child, according to the draft.
Edison announced in late July that it was creating a program to directly compensate Eaton fire victims to help avoid lengthy litigation. The Jan. 7 fire destroyed more than 9,400 homes and other structures in Altadena and killed at least 19 people.
Pedro Pizarro, chief executive of Edison International, the utility’s parent company, said in a press release Wednesday that the compensation program for victims was “designed to help them focus on their recovery.”
The company said that it would hold four community meetings to get public comments on the proposed compensation plan, the first scheduled for Thursday at 7 p.m.
“While the investigation continues, inviting input on draft details is the next step in helping the community rebuild faster and stronger,” Pizarro said.
Edison said it had hired consultants Kenneth Feinberg and Camille Biros, who both worked on the September 11th Victim Compensation Fund, to help create the program.
“The proposed fund is designed as an alternative to conventional litigation in the courtroom,” said Biros. “The terms and conditions are completely transparent and voluntary. No claimants or their lawyers are required to participate until and unless they are satisfied with the compensation offer.”
Private lawyers representing Eaton fire victims have urged caution. They say similar programs created by utilities to compensate victims of other wildfires resulted in lower payouts than families received through lawsuit settlements.
In court, Edison already faces dozens of lawsuits filed by Eaton fire victims. Settling those lawsuits is expected to take years. Attorneys bringing the cases on behalf of victims would get 30% or more of the eventual settlement amounts.
Edison’s draft protocol lists proposed payments for people who were injured, renters who lost their belongings and businesses that lost property or revenues when they were forced to close.
Among the payments to the families of those who died would be $1.5 million for pain and suffering and other noneconomic damages, according to the draft. Each surviving spouse and other dependent would receive an additional $500,000.
In addition, the family who lost a loved one would receive a direct claim premium — a bonus for settling directly with Edison — of $5 million, according to the plan.
Edison said the direct claim premiums — which include $200,000 for families who lost their home, $10,000 to those whose homes were damaged, as well as other amounts for other victims — were only available through its program and would not be offered in litigation.
The utility said victims don’t need an attorney to apply for the compensation. But it is also offering to add 10% to the damage amounts, excluding the direct claim premiums, to cover legal fees of those who have a lawyer.
Victims will get their compensation offers within nine months of applying, Edison said. The company said it was also offering victims a “fast pay” option where they could receive their financial settlement offer within 90 days.
“Speed in processing claims is essential,” Feinberg said.
Edison has said that the government’s investigation into the fire could take as long as 18 months. Pizarro said in April that a leading theory was that a century-old transmission line that had not been in service since the 1970s somehow became reenergized and sparked the fire.
If Edison’s equipment is found to have caused the blaze, the company would be reimbursed for the cost of amounts it pays to victims by a $21 billion state fund. The fund was created by lawmakers in 2019 to shield utilities from bankruptcy if their equipment ignites a catastrophic fire.
The public must register to attend the meetings at ce.com/directclaimsupdates. The final meeting is at 7 p.m. on Monday.
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