On 20th Anniversary, Lockerbie Families Received Final Compensation

December 21, 2008

On December 21, 1988, Pan Am Flight 103 exploded over Lockerbie, Scotland, killing all 259 people on board as well as 11 on the ground. After a three-year investigation, indictments for murder were issued on November 13, 1991, against Abdel Basset Ali al-Megrahi, a Libyan intelligence officer and the head of security for Libyan Arab Airlines (LAA), and Lamin Khalifah Fhimah, the LAA station manager in Malta International Airport, Malta.

When Libyan dictator Muammar Qaddafi refused to extradite the men for trial in an American or British court, the United Nations Security Council imposed economic sanctions over Libya. Through the intercession of South African President Nelson Mandela and U.N. Secretary-General Kofi Annan, Qaddafi agreed in 1999 to a compromise that involved handing over the defendants to the Netherlands for trial under Scottish law. United Nations sanctions were immediately suspended; U.S. sanctions against Libya, however, remained in force.

In August 2003, two years after Megrahi’s conviction, Libya wrote to the United Nations formally accepting “responsibility for the actions of its officials” with respect to the Lockerbie bombing and agreed to pay compensation of up to $2.7 billion ($10 million each) to the families of the 270 victims. The agreement, however, had conditions.

The first $4 million was paid to each family in early 2004, once the United Nations lifted weapons and travel sanctions against Libya. The second payment of $4 million each was made to families once the U.S. State Department lifted trade sanctions, allowing American companies to buy or invest in Libyan oil and oil products. Before it would pay the final $2 million, however, Libya required that it be removed from the U.S. State Department’s list of states that sponsor terrorists. Because the U.S. refused to take Libya off its list of state sponsors of terrorism, Libya retained the last 20% ($540 million) of the $2.7 billion compensation package.

Finally, in July 2008, Congress passed the Libyan Claims Resolution Act. Under the act, signed by President Bush in October, Libya paid the remaining $540 million. In exchange, Libya was removed from the list of terrorist nations and granted immunity from future claims arising from the bombing. The final payments came in December, just before the 20th anniversary of the bombing.

Stanley M. Chesley and Waite, Schneider, Bayless & Chesley are honored to have represented the families of 11 passengers, to have served on the Plaintiffs’ Steering Committee, and to have helped to achieve justice for all Lockerbie victims.