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US$500m compensation fund to open for families of the 737 MAX crashes

written by Isabella Richards | June 23, 2021
Boeing 737 MAX 10 (Boeing)

In order to compensate the families of the victims who died in the two fatal 737 MAX crashes of 2018 and 2019, the US Justice Department has opened a US$500 million fund.

On Monday, Boeing and the US Justice Department opened the fund as part of a settlement agreed upon in January, giving a total of US$500 million to the families whose relatives were involved in the Lion Air flight 610 accident in 2018, and Ethiopian Airlines flight 302 in 2019, according to the Reuters exclusive.

According to Washington lawyers Ken Feinberg and Camille Biros, eligible families will receive almost $1.45 million and will be paid according to claim forms. The families have until 15 October to submit their claims.

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In September 2019, Boeing began to pay the families a total sum of US$50 million in financial assistance. This was in addition to another US$50 million the company would spend on supporting education and economic empowerment in impacted communities.

However, many of the families and representatives were disappointed. Bob Clifford, a representative of the families claimed the compensation was “vague” and “disingenuous”, saying the fund only made the issue more confusing.

The original fund would pay the families each US$144,500 and families would not have to give up their rights to litigate.

Issues only got worse for Boeing, as the US planemaker was fined earlier this year a sum of US$2.5 billion for deceiving FAA safety officials who initially cleared the 737 MAX to fly.

Under the terms of the deal, Boeing had to pay US$2.5 billion, composed of a penalty of US$243.6 million, compensation payments to MAX airline customers of US$1.77 billion, and the establishment of a US$500 million crash-victim beneficiaries.

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The Department of Justice said Boeing admitted to deceiving FAA safety officials about the crucial Maneuvering Characteristics Augmentation System (MCAS) software system that is better known as the stall-prevention system at the heart of the two crashes.

Not long after that, last month Boeing was to pay US$17 million after the company installed equipment in 700 737 MAX aircraft with sensors yet to be approved.

This began a major re-establishment of the company’s safety precautions, as it continued paying numerous fines over the last few years.

A few weeks ago, the FAA mandated all Boeing 737 MAX jet operators to conduct additional inspections on its automated flight control system, MCAS – this was in line with the FAA ensuring they would keep Boeing accountable after the most recent fine.

Specifically, the directive, dated 16 June, states aircraft are required to be checked an additional three times to “verify that functions have not failed”.

These inspections will be on top of existing ones, to “ensure the continued functioning of certain systems throughout the life of the airplane”, the FAA said in the statement.

Boeing and the US Department of Justice declined to comment on the fund.

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