Amtrak To Pay No More Than $200 Million To Derailment Victims

Amtrak To Pay No More Than $200 Million To Derailment Victims

Amtrak will have to pay no more than $200 million to victims of the May 13 Amtrak train derailment in Philadelphia (as previously covered by the Inquisitr,) due to a cap established by Congress in 1997 to save Amtrak from financial ruin, according to The Washington Post.

This will be the first time that Amtrak has ever faced the maximum payout in the aftermath of a disaster. However, in light of eight deaths and over 200 wounded, the $200 million limit, which has never been adjusted for inflation – $200 million in 1997 is roughly $300 million today, may not be enough, and Amtrak is still very far from the independent success Congress was hoping it would be when they established the cap.

The Amtrak train was allegedly moving at more than twice the allowed speed on a curve when it derailed. Investigators have been unable to determine the reason for the Amtrak train’s unprecedented speed, but that hasn’t stopped at least one Amtrak employee from going ahead with a lawsuit, filing for more than $150,000 in damages on Friday. Amtrak employees, not being passengers, are exempt from the $200 million cap.

As CNN reports, Amtrak has already been ordered by the Federal Railroad Administration to install an Automatic Train Control (ATC) system on the section of track where the derailment occurred and Amtrak crews were working overtime this weekend to put the system in. An ATC has always existed on the southbound track at that location, given that trains enter the 50 mph curve following a maximum speed of 110 mph, but the northbound system, going from 80 to 50, “is considered within the risk envelope,” according to an email from Amtrak.

Some lawyers are expecting the costs of the derailment to be in line with a Metrolink/Veolia Environment rail accident in Los Angeles, circa 2008, in which 25 were killed and more than 100 injured. $200 million was divided among the victims by a judge, lawyers indicating that in some cases the amounts awarded were far less than the victims needed to cover medical costs.

When the cap was passed into law, Amtrak was facing bankruptcy and Congress had been struggling to find ways to make the government-subsidized company profitable and independent for three years. “Limits on liability are essential for our economic future,” said former Amtrak president Tom Downs. At the time, Amtrak only had about $200 million in liability insurance, as they were financially liable for any accident involving Amtrak and insurance providers were charging them huge premiums.

Amtrak and the rail industry have since successfully lobbied against increasing the $200 million cap.

[Photo by NTSBgov via Getty Images]