U.S. Terrorism Insurance Act Provides for Civil Causes of Act

Prior to adjourning during its lame-duck session, the U.S. Congress enacted S. 2600, the “Terrorism Risk Insurance Act of 2002,” which provides for civil causes of action to victims of transnational terrorism. Section 10(a)(1) provides for a Federal cause of action for “property damage, personal injury, or death arising out of or result from an act of terrorism.” The cause is the exclusive cause of action and remedy, except that Section 10(d) provides that it cannot be construed to limit the ability of any plaintiff “to seek any form of recovery from any person, government, or other entity that was a participant in, or aider and abettor of, any act of terrorism.” Section 10(a)(2) clarifies that all state causes of action of any kind relating to the same matters that are otherwise available under State law, are preempted except as provided for in Section 10(d). Under Section 10(b) the substantive law for decision in a cause of action must be derived from the law, including applicable choice of law principles, of the State in which the act of terrorism giving rise to the action occurred, except to the extent (1) the law, including choice of law principles, of another State is determined to apply to the action by the district court hearing the action; or (2) otherwise applicable State law that is inconsistent with or otherwise preempted by Federal law. The new law will enable victims of alleged international terrorism to sue and recover. It will also caused more diplomatic disputes with foreign governments over sovereignty and ultimately lead to reciprocal laws and suits against the U.S., especially due to its omnipresence resulting from its Superpower status and its tendency to stretch the limits of the rule of law.