A federal judge has approved a renegotiated settlement to compensate about 10,000 workers whose health was damaged during the rescue and clean up at the World Trade Center following the terrorist attack of 9/11.

The new $712.5 million settlement increases payouts to those injured and caps the fees going to plaintiffs’ attorneys.

It comes a little more than two months after U.S. District Judge Alvin K. Hellerstein ordered the parties to renegotiate a deal saying that too much of the original $657.5 million settlement was going to plaintiffs’ attorneys and not enough to the victims.

Under the new deal plaintiffs’ attorney fees are capped at 25 percent, adding $50 million to the fund, the WTC Captive Insurance Co is paying an additional $50 million to $55 million in cash, and New York City is waiving certain workers’ compensation liens. As a result of those savings, the payout to WTC plaintiffs will increase by up to $125 million.

In a statement WTC Captive Insurance Co president and CEO Christine LaSala said:

This settlement gives the plaintiffs immediate, fair and reasonable compensation, certainty and closure after years of protracted and costly litigation that will continue without this agreement.”

La Sala also noted that the settlement establishes objective criteria, based upon accepted medical standards, to assess the type and severity of each illness alleged in order to achieve a fair value for each claim.

Under the settlement those suffering debilitating respiratory illnesses such as severe asthma, could receive between $800,000 and more than $1 million. Approximately $1.5 million could go to compensate death claims.

Plaintiffs who have no qualifying injury, but have a legal claim for fear of becoming sick, will receive $3,250. A special insurance policy through MetLife will provide coverage for certain blood and respiratory cancers diagnosed during the coverage period, paying a benefit of up to $100,000.

Judge Hellerstein will hold a public hearing June 23 to hear from parties to the settlement. For more on this story check out a New York Law Journal report via law.com and an online article at National Underwriter. Check out the new I.I.I. paper Terrorism Risk: A Reemergent Threat.