Sixteen German corporations accused of profiting from forced labor during the Holocaust yesterday announced a plan to compensate victims, a surprise effort to end a growing public relations problem and short-circuit a handful of lawsuits.
Attorneys for the survivors immediately denounced the proposal as inadequate and charged that the companies -- including BMW AG, Siemens AG and DaimlerChrysler AG -- are trying to shortchange victims and had underhandedly scuttled settlement talks. The attorneys said they believed as recently as yesterday morning that the two sides would meet soon to continue negotiations on an out-of-court settlement.
"This is an attempt to shove something down the victims' throats," said Mel Weiss, an attorney in the case. "If they want to settle the legal claims, then they better sit down with legal representatives, not in a public and unseemly way, but in private."
Under the settlement, the companies offered to establish a foundation that would issue checks to individuals based on how long each survivor had been forced to work and pegged to the average pension levels of retirees in their respective countries. No specific damage amounts were discussed in the proposal.
Experts described the companies' proposal, unveiled yesterday morning at a news conference in Berlin, as a bold bit of legal brinkmanship. The companies are hoping that the offer and its promise of relatively quick payoffs will encourage victims to end the litigation. Most Holocaust survivors are elderly and many could die before the cases wind through the courts.
One condition of the proposal is that the group be granted long-term protection from pending and future lawsuits. And if this initiative ends the lawsuits, the companies are likely to spend less in damages. Plaintiffs lawyers are expected to walk away from such an out-of-court deal with little or nothing, rather than a hefty percentage of damage awards, which could exceed $2 billion.
The companies said they were proposing the payments strictly as a humanitarian gesture and reiterated their contention that the companies bear no legal responsibility for the suffering of victims. The companies have argued that German companies during the Nazi era had no choice but to play by the Third Reich's rules, which included using forced laborers.
"The companies backing the foundation are doing so because they seek to fulfill a moral responsibility," the companies said in a statement.
In a series of class-action lawsuits, a group of plaintiffs attorneys and Jewish groups have alleged that more than a dozen German companies should compensate hundreds of thousands of Germans, Poles and Russians who were forced to work in inhumane and often fatal conditions in German factories during World War II.
Representatives for both sides met yesterday at the State Department, but plaintiffs attorneys abruptly left after realizing that the firms were holding a news conference in Germany at the same time announcing the plan. The attorneys quickly assembled their own news conference in the D.C. law offices of Cohen, Milstein, Hausfeld & Toll.
"These companies have sabotaged the process," said Hausfeld, who vowed to pursue the cases in court.