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Widespread effects of September 11; IN MY VIEW.

Byline: ALUN JONES

The atrocious events which recently befell the City, citizens and visitors of New York will serve to ensure the notoriety of the date, September 11, 2001. No one who witnessed the events will ever forget the deplorable scenes played out on the other side of the Atlantic.

The immediate impact of the terrorist attacks were undoubtedly felt more by those families and businesses directly involved or affected. We may wonder however, whether the aftermath of the worst terrorist atrocities ever seen will have any affect on our daily lives and future plans.

The cost of clearing up the devastation and re-locating affected businesses is likely to be high. The true financial cost of the atrocity is unknown. Massive insurance payouts are expected. The cost of cleaning up after Hurricane Andrew, the most expensive insurance disaster loss to date, was approximately pounds 14bn. Insurance industry journals estimate the cost of this atrocity to vary between pounds 10bn to pounds 20bn. The greater the cost, the greater the affect could be on our own domestic insurances here in Wales.

In very simple terms, insurance companies generally spread the risk of suffering losses on policies of insurance by "reinsuring" part of their risks with reinsurers. For example, the principal insurance companies covering the losses arising from the attacks on the World Trade Centre may have "reinsured" a part of that financial risk with a number of reinsurers. The losses experienced will be spread over those principal insurers and reinsurers involved. If the reinsurers are asked to make large contributions to the insured losses, premiums for general insurance policies covering such matters as accidents at work, fire, general liability, loss of business, motor, travel and aviation may be affected by rate increases to cover the future cost of reinsurance premiums.

From a purely legal perspective, those victims, individual and business alike, are likely to find it impossible to sue the real culprits, even if they can be identified. Instead, victims will have to look to the airlines, their agents and the airport authorities for compensation. The courts will have to decide whether anyone was negligent in allowing the atrocities to happen, and, if so, whether they are liable for any losses. Losses could include not only the personal losses of the victims but also those of the business owners and insurers of the affected buildings and infrastructure.

Furthermore, our own civil liberties may be affected by measures designed to combat the threat of terrorism in the UK. Our civil liberties, or rights, lie at the core of our democratic society.

We essentially have the right to go about our own business as long as we behave lawfully and in an inoffensive manner. The Human Rights Act 1998, introduced one year ago, embodied our basic civil rights. Yet, in light of the atrocities, a number of initiatives, now tabled for discussion, may have a bearing on those rights.

We will all undoubtedly agree that measures to extend the legislation for the control of terrorism and introduce a new fast-track extradition system are to be welcomed, however careful discussion is surely needed when considering the proposed introduction of compulsory identification cards and sweeping changes to the asylum laws. Changes to the law have little meaning unless they are done for the right reasons.

Alun Jones is a lawyer with the Cardiff offices of law firm Hugh James Ford Simey, specialising in insurance litigation.
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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Date:Nov 17, 2001
Words:570
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