WACAP

World Association for Children and Parents

November 3, 2003

U.S. Department of State

CA/OCS/PRI

Adoption Regulations Docket Room

2201 C Street NW

Washington, DC 20520

RE: Docket number State/AR-01/96

Dear Friends,

World Association for Children and Parents (WACAP) extends its thanks
and appreciation to Deborah Spivack and Jeannene Smith for their
carefully prepared, thorough evaluation of the liability and insurance
issues raised by the proposed Hague regulations. See attached email from
Reach Out, NJ to JCICS Members List, dated October 22, 2003. WACAP
shares their concern regarding the tremendous burden the proposed
regulations places on agencies. Although these regulations offer
excellent safeguards to ensure the integrity of intercountry adoption,
they place an undue (and, in many circumstances, impossible) burden on
"Primary Provider" agencies to assume nearly all of the myriad risks
inherent in intercountry adoption. Such regulations put agencies, their
employees, volunteers, directors and officers, at great risk in the
unfortunate event that a child with undiagnosed conditions is placed in
a family who cannot cope with the demands of a special needs child. The
risk that an adoption will go awry, or that a child will be placed with
previously unknown or undiagnosed conditions, is a reality in
intercountry adoption. As such, it is a risk that well-informed,
well-intentioned adoptive parents willingly accept. Further, the
well-drafted accreditation requirements provide more than adequate
incentive for agencies to fulfill their obligations under the
Convention. The threat of undue exposure for civil liability does
nothing to improve adoption practices. Indeed, the threat may well
result in good agencies shutting their doors.

WACAP offers the following, additional comments:

The Liability and Risk Allocation Provisions (§96.45(c) and §96.46(c)

While WACAP agrees with the majority of the comments by Ms. Spivack and
Ms. Smith, our experience and research causes us to differ on one point
-- adoption agencies' exposure for compensatory damages in wrongful
adoption suits. The scope of risk adoption agencies face in our
litigious society far exceeds the cost of reimbursing adoption fees. The
most distinct example of the potential exposure is a case where a child
is placed in the home and later is discovered to have a severe physical,
mental or emotional condition which requires extraordinary care. If an
agency is found to have not exercised reasonable care in either
education the parents or disclosing risks or in investigation and
disclosing the child's medical history, the agency could be held liable
for the costs of treatment of the undisclosed condition. Depending on
the condition and the age of the child, this cost could run into
hundreds of thousands of dollars. This is in addition to claims for
emotional distress suffered by the adoptive parents, which are often
asserted in these types of cases. In addition to potential damages in
the six and seven figure ranges, the cost to defend such suits can reach
six figures if defended through trial. Many of the liability policies
available to adoption agencies include costs of defense under the limits
of liability. In other words, if an agency has a \$1 million limit of
liability, and an insurance carrier spends \$100, 000 in attorneys' fees
and costs, on\$900,000 remains to settle claims. Depending on the
severity of a child's condition, that figure may not be sufficient to
cover the costs of caring for the child and the sum awarded the parents
for emotional distress.

All agencies, whether big or small, are exposed to lawsuits and
potential liability if a child is placed in a home and later discovered
to have an undisclosed, undiagnosed, or previously unknown condition.
Potential plaintiffs in these types of suits could argue negligence on
the part of the agency in the homestudy process (for failure to advise
of the risks of intercountry adoption and from the particular region);
for failing to conduct a "reasonable" investigation in the child's
background and medical status; and for failing to advise of risk factors
that rendered a child more susceptible to certain conditions or
behaviors. These liability risks, among others, exist under our current
system. In most circumstances, however, if the agency acted with
reasonable care in educating the adoptive parents, aced reasonably in
obtaining and disclosing all available medical information, and acted
reasonably in disclosing the known risks for adoption, the wrongful
adoption claims are defensible. Indeed, in searching for verdicts and
settlements in wrongful adoption claims, we found a number of reported
defense verdicts in these circumstances. The Hague regulations
effectively take away the "reasonable care" standard for acts and
omissions of Supervised Providers. In other words, regardless of the
care exercised by the Primary Provider, if a Supervised Agency acts
negligently, the reasonable actions of the Primary Provider irrelevant
in this context.

Our evaluation of the exposure agencies face in wrongful adoption claims
underscores how devastating the proposed regulations regarding liability
and risk allocation are. This assessment provides compelling support for
Ms. Spivack's and Ms. Smith's well-articulated concern that the
liability provisions may force some agencies out of business. If
agencies were only liable to refund adoption fees, that risk may be
appropriately placed on the Primary Provider. Unfortunately, under the
proposed regulations, a lawsuit could expose an agency to a seven figure
verdict for acts or omissions by individuals in foreign countries over
who the agency has little to no practical control.

The Indemnification Provisions, §96.45(d) and §96.46(d).

The drafters may argue that the regulations provide sufficient
protection to Primary Providers by permitting indemnification provisions
in written agreements with Supervised Providers. See §96.45(d) and
§96.46(d). As a practical matter, this provision is meaningless as the
entities with whom we work in foreign countries do not have the
resources (or the insurance coverage) available to fulfill the
indemnification obligation. Further to enforce the indemnification
provisions, Primary Providers would have to take legal action against
the Supervised Provider in the Supervised Provider's country. Permitting
these types of indemnification provisions provides little to no recourse
for Primary Providers.

The Availability and Cost of Appropriate Insurance, §96.33(h).

An important component touched on by Ms. Spivack and Ms. Smith, is the
availability (or lack thereof) of insurance policies to cover the types
of risk inherent in the intercountry adoption . WACAP recently went
through its insurance renewal process and our experience highlights the
insurance crisis that is on the horizon -- a crisis that will come to
the forefront if the proposed regulations are adopted. WACAP was
presented with only two options for Commercial General Liability
policies with Professional Liability coverage. We were told that there
were only three insurance companies currently writing General Liability
policies for international adoption agencies. One of these companies had
been our insurer for three years and chose not to review. One company
offered \$1 million per occurrence/\$1 million aggregate policy with no
coverage for physical and sexual abuse claims with yearly premiums of
\$250, 000. The third insurance company offered WACAP a \$1 million per
occurrence/\$2 million aggregate policy, with coverage for physical and
sexual abuse claims for approximately \$210,000. While the specifics of
these policies and the scope of coverage offered vary, our experience
highlights that despite our excellent record, reputation and "loss
histories" and well drafted waiver provisions in our documents, a
lawsuit, regardless of merit, can jeopardize an agency's ability to
obtain coverage. If the proposed Hague regulations go into effect with
the liability and risk allocation provisions in place, we question
whether any insurance carrier will continue to write policies for our
community and if so, at what cost. The following reflects how this
regulation will financially impact agencies of all sizes as well as,
ultimately, the adoptive family.

  ------------------------------------- ---------------------- -----------
  **Current Yearly Cost of Obtaining    **Divided by Number of **Cost per
  New Insurance for One Million Dollars Adoptive Families Per  Family**
  Coverage - Not including coverage for Year**                 
  Homestudy agency or Foreign Partner.                         
  Annual Premium;**                                            

  \$210,000                             30                     \$7000

  \$210,000                             100                    \$2100

  \$210,000                             300                    \$700

  \$210,000                             600                    \$350

  \$210,000                             900                    \$233
  ------------------------------------- ---------------------- -----------

The "No Blanket Waivers" Provision, §96.39(d).

Perhaps the most devastating effect of the Regulations on adoption
agencies' abilities to manage their risk, is §96.39(d). An appropriate
drafted release and hold harmless agreement serves to protect adoption
agencies from liability for the risks inherent in the process -- most
notably, the risk that children will arrive in their families' homes
with undiagnosed or unknown conditions. These agreements place the risk
of adoption on the adoptive parents -- a concept that has always been
present in adoption. There have never been and there can be no
"guarantees" in adoption. In the adoption triangle, it is the adoptive
parent who has assumed the risk that the child he or she accepts may
arrive with unknown conditions that will present a challenge to the
family. Further, it is the adoptive parent who assumes the risk that
their child's country of origin will place a moratorium on all
adoptions. The well-informed, properly educated adoptive parent
willingly accepts these risks and appreciates that the benefit of
welcoming a child into his or her home far outweighs the risks involved.
The proposed regulations change this paradigm relieving adoptive parents
of responsibility for assuming the risks which arise from, as Ms.
Spivack and Ms. Smith so adeptly, state, "The same circumstances that
lead to children becoming available for international adoption" in the
first instance. Section 96.48 requires that agencies provide the
information necessary to educated prospective adoptive parents about the
risks they face in intercountry adoption. If parents knowingly and
willingly assume those risks, agencies should be permitted to protect
themselves if those risks materialize.

WACAP joins in the call fro adoption agencies, adoptive parents, and
their insurance professionals to weigh in on these critical issues so
that the children most at need can continue to be served.

L. Michael Feltman

Chief Executive Officer

World Association for Children and Parents.

**Following is the E-mail to which WACAP refers above. This email was
sent to JCICS membership from Deborah E. Spivack, Esquire, Executive
Director, Jeannene Smith, Founder of Reaching Out thru International
Adoption on October 22, 2003.**

By this memorandum, we are hereby providing our comments to certain risk
and liability sections of the proposed Hague Regulations. The official
comment period ends on November 14, 2003. We would ask that you consider
our viewpoint as an international adoption agency in seeking certain
changes to the proposed regulatory scheme.

1\. Introduction

The Proposed Hague Regulations provide some excellent guidance for
international adoption agencies to follow to ensure that important
policies behind the Hague Adoption Convention are effected. The Hague
Convention's stated policy is to protect the children, birth parents and
adoptive parents involved in intercountry adoptions and to prevent
child-trafficking and other abuses. On many issues, the drafters of the
Regulations were on the mark in accomplishing these important goals.
However, certain provisions that cover risk an dliability issues
directly counter certain of the goals of not only the Hague Convention,
but of the Regulations themselves. While initially the adoption agencies
may pay the price by increased costs or going out of business
altogether, ultimately, the children of foreign nations and adoptive
parents will suffer from the high costs and responsibilities heaped on
the agencies, and there will likely be a chilling effect on
international adoption to the benefit of no one.

The following statement in the Regulations goes right to the heart of
our concerns: \
\
In deference to the historically important role the formation of
networks and the use of small agencies and persons have played in
providing services \...the Department has created regulations that allow
such relationships among agencies to continue.  The Department\'s goal
is to mirror current practices and to provide regulatory flexibility so
that the regulations do not negatively affect small agencies and persons
and other providers.\
\
**Proposed Regulations, p. 54077.  Notwithstanding this important
recognition, the drafters propose implementation of a financial
framework that endangers the agencies\' very existence.  Specifically,
the financial framework does the following:\
**

\(i\) Statutorily assigns all risk between adoptive parents and their
agencies/service providers to the agency/service providers;

\(ii\) Channels all liability of adoption service providers throughout
the system to a single \"primary provider;\"

\(iii\) Ties the agencies\' hands from sharing any risk within the
system with adoptive parents by prohibiting informed waiver provisions;

\(iv\) Requires maintenance of \$1,000,000 per occurrence of insurance
coverage; and\
\
(v) Incongruously, imposes non-profit status on most agencies.\
\
With the exception of the requirement for non-profit status, imposition
of any of these requirements alone would be an enormous hardship for
most agencies.  However, taken together, the drafters have imposed an
impossible scheme for agencies to implement.\
  \
2.  Analysis\
\
(a)   Assignment of Risk between Adoptive Parents to Service Providers
and Channeling of Such Liability to a Single Primary Provider\
\
By enacting certain liability sections of the Proposed Regulations, the
drafters are placing an improper and unmanageable financial burden on
the agencies that serve as primary providers.  Specifically, the
provisions expressly require that agency primary providers retain legal
authority and \"(1) assume tort, contract, and other civil liability to
the prospective adoptive parent(s) for the supervised provider\'s
provision of the contracted services and its compliance with the
standards in this subpart F; and (2) maintains a bond, escrow account or
liability insurance in an amount sufficient to cover the risks of
liability arising from its work with supervised providers..."  Proposed
Reg. 96.45(b)(8) & (c) and 96.46(b)(9) & (c).  These provisions have 2
important implications:\
\
(i) The provisions will channel all liability, in tort, contract or
otherwise within each case to a single \"primary provider\" for the
actions of all adoption service providers in the U.S. and abroad in the
process (subject to certain limited exceptions); and\
\
(ii) The provisions will assign all risk that is inherent in the
international adoption system to the agencies versus the adoptive
parent(s), thereby creating a statutory cause of action for the adoptive
parents to pursue against their agencies.

The drafters' stated goals were: (i) to "improve supervision," by
American agencies over its counterparts in the U.S. and abroad,
Preamble, at 54081, and (ii) to give parents "legal recourse against a
single entity." Preamble, at 54081. The drafters' proposed solutions
present enormous dangers for a number of reasons.

First, it is a known fact within the international adoption industry
that agencies have little meaningful control over their foreign
counterparts. In addition to obvious language and cultural barriers,
many foreign agency contacts do not have access to the money, resources,
health care, training, record keeping, or legal services that are in
anyway comparable to those that we have in the United States. American
agencies cannot reasonably be expected to visit every orphanage, attend
every doctors' visit, file every paper for every child eligible for
international adoption. If resources were available to help children in
foreign lands to this extent, it is unlikely that there would be such an
enormous need for international adoption to help the children of these
nations. American agencies' chances of successfully policing their
foreign counterparts is extraordinarily difficult to accomplish, and
this purpose will not be furthered effectively by imposition of
liability on such agencies.

Second, in relation to U.S.-based supervised providers, most of whom do
only home study, parent preparation and post-placement services, the
Proposed Regulations would cause accredited agencies to avoid using
their services altogether. Given a choice between utilizing the services
of another accredited provider for these functions and utilizing an
unaccredited supervised provider, most accredited agencies would be
unwilling to accept the legal responsibility and liability that using
supervised providers would entail under the proposed regulatory scheme. 
If these small agencies and social workers (who collectively place
thousands of children) are unable to procure written agreements with
accredited agencies, they will surely go out of business.  The drafters
must recognize that these small providers are a vital link in the
international adoption community, and without them, many children and
adoptive parents will be lost to one another.  And, ironically, these
small local service providers are the only ones who can still get their
own professional liability insurance coverage without difficulty since
they are not involved with placing children and are almost never sued.

Third, channeling of liability to the primary provider to "improve
supervision" is duplicative of other provisions in the Hague Regulations
and, therefore, unnecessary. The drafters proposed a reasonable and
appropriate means of encouraging supervision by expressly requiring
agencies to investigate their foreign contacts, and to ensure that
supervised providers here and abroad are ethical, meet certain
standards, and understand and abide by the principles behind the Hague
Convention.  See Preamble, at 54084; Proposed Reg. Sec. 96.45(a) &
96.46(a).  The Hague Regulations take the further well-justified step of
requiring that American agencies execute written agreements with their
supervised providers in the U.S. and abroad that impose certain
predefined requirements and certifications that are consistent with the
Convention goals.  Proposed Reg. Sec. 96.45(b) & 96.46(b).  In short,
absent the liability provisions, the Hague Regulations already propose a
scheme for reasonable supervision which American agencies can reasonably
and effectively impose over their U.S.-based and foreign supervised
providers, and this scheme does not endanger agencies in the manner they
are impacted by the liability provisions.

Fourth, the drafters have placed an enormous financial burden on the
agencies that the agencies are in no position to assume.  Most agencies
are not deep pockets - they are non-profit corporations with inherently
limited resources.  Non-profit corporations face enough of a challenge
in training and promoting responsible behavior of, and protecting
themselves from the negligence of, their own employees without asking
them to assume responsibility for the \"local service providers\" in the
U.S. as well as for third party independent contractors in foreign
lands.

Agencies are in business to promote the charitable purpose of
\"unit\[ing\] children living in terrible conditions in foreign
orphanages with parents who want them,\" Howard M. Cooper, \"Enforcement
of Contractual Release and Hold Harmless Language in \'Wrongful
Adoption\' Cases,\" Boston Bar Journal, May/June 2000.  For this reason,
the state and federal government have granted such agencies non-profit
status so that they can fulfill their important mission.\
\
If anything, non-profit corporations deserve protection from liability
in this already overly litigious society.  For this precise reason, some
states have enacted statutes that provide non-profits with immunity from
liability for its own negligence.  For instance, the New Jersey
Charitable Immunity statute provides as follows:\
\
No nonprofit corporation, society or association organized exclusively
for religious, charitable or educational purposes or its trustees,
directors, officers, employees\... shall \... be liable to respond in
damages to any person who shall suffer damage from the negligence of any
agent or servant of such corporation \... where such person is a
beneficiary, to whatever degree, of the works of such nonprofit\...\
\
See N.J. 2A:53A-7.  Non-profit immunity statutes codify the public
policy that ensures that the dedicated staff of not for-profit
corporations can accomplish their charitable purpose free of fear from
litigation due to negligence. Forcing non-profit international adoption
corporations to expressly assume the liability not only for their own
employees but for supervised providers here and in foreign lands over
whom agencies have no direct control runs counter to other non-profit
policy and law and imposes an extraordinarily heavy burden.\
\
Fifth, the language of Sections 96.45(c) and 96.46(c), statutorily
shifts all risk undertaken by prospective adoptive parents in pursuing
foreign adoption to their agencies and creates a statutory cause of
action for them. These provisions will invite litigation from adoptive
parents against the very agencies that are trying to help them build a
family.\
\
The predetermination of this result is expressly stated in the Preamble,
which provides the purpose of these provisions is to \"give the adoptive
parents legal recourse against a single entity\...\"  Preamble V(c)(6).
However, why do parents need a statutory right to sue? Parents already
have a right to sue and are actively using it!  See Wall Street Journal,
December 7, 1998, \"Are Adoption Agencies Liable for Not Telling All?\" 
In fact, these regulations will promote litigation and, thereby, pit
agencies against other agencies and agencies against client adoptive
parents.  This blame-oriented framework will ultimately destroy the
mutual trust the agency community works so hard to build.

Those who have advocate for recourse through litigation may suggest that
the liability provisions are a necessary to punish the agency so that
they will seek to ensure that the event that led to a disappointing
result for the adoptive parents will not reoccur.  However, agencies
cannot practicably control the world events, orphanage conditions,
available medical equipment, unknown genetic predispositions, or any of
the other risks that lead to the disappointing result in the first
place.  Using liability as a hammer to force agencies to improve these
types of events will be excessive and ineffective.\
\
Moreover, the drafters have already - appropriately - proposed a scheme
that will ensure that agencies maintain equitable standards, ensure they
work with third parties who maintain ethical standards, and be punished
in the event they fail to comply with Hague standards. See Hague
Regulations Subpart J.  Specifically, the Proposed Regulations already
contain a system that permits adoptive parents to file complaints
against agencies, that ensures their timely investigation, and that
permits imposition of adverse actions or other sanctions.  In short, the
drafters do not need to layer the liability provisions on top of this
solid framework to provide for agency accountability.\
\
Those who advocate for recourse through liability may further suggest
that the liability provisions are an appropriate mechanism to compensate
the parents for economic losses resulting from the acts of the foreign
coordinators.  However, why should the agencies be forced to accept
fiscal responsibility for all participants throughout the entire
system?  The agencies are serving the greater good of carrying out their
charitable mission for the children of the world.  If the drafters wish
for parents to have a means of compensation in the event of a tragic
result, there are more reasonable alternatives that can be implemented
on their behalves.  See Section 3, below.\
\
Further, giving adoptive parents carte blanche to sue their adoption
agencies would not only expose the agencies to enormous financial risk,
but it would increase the agencies\' legal and insurance costs
tremendously! These tremendous costs, would, in turn, be passed on to
the adoptive parents and further increase the cost of their adoption
substantially. Of course, the increased cost of higher insurance
premiums presumes that we are able to acquire such a policy in the first
place. Our insurance broker has advised us specifically that no carrier
with which his agency works would insure for the acts of foreign
independent contractors.

Finally, the flaws discussed above are not remedied by the drafters\'
permitting the agencies to retain the right to seek indemnification
against their providers.  See Proposed Regulation 96.45(d) and
96.46(d).  The agencies will be long out of business before they could
ever make use of these tools.

\(b\) Prohibition Against Contractual Waivers\
\
In addition to statutorily assigning all risk to agencies that normally
is shared with parents, the drafters further prohibit reallocation of
this risk by contract.  Specifically, the Regulations state \"the agency
or person \[may\] not require a client or prospective client to sign a
blanket waiver of liability in connection with the provision of adoption
services in Convention cases.\" Section 96.39(d). \
\
It is currently standard practice for agencies to advise their clients
that international adoption is not a risk-free means of growing their
families.  Agencies advise the adoptive parents at the outset of the
process that they will be working in a foreign country, with a foreign
government, foreign language, foreign culture, foreign medical systems
and will be subject to the unknowns of foreign law and custom.  We all
run the risk of countries spontaneously deciding to close their adoption
programs. Moreover, agencies cite the universal risk of developmental
delays in orphanage children and the possibility of unknown or
undiagnosed medical and psychological conditions of the children due to
factors beyond their control.  After acknowledging the possible hurdles
and roadblocks, many prospective adoptive parents choose to proceed
despite the known obstacles.  And agencies reasonably ask parents to
forego suing the agency if any of the risks becomes a reality.\
\
Once again, the drafters have altered current practice substantially,
and prohibited adoption agencies from protecting themselves in this
abundantly reasonable manner.  Simply stated, to be able to survive as a
business, agencies must be able to share the risk and to protect
themselves contractually from the threat of litigation by adoptive
parent(s).  Why should agencies be prohibited from educating their
clients about the inherent risks and asking them to decide whether they
wish to proceed?  As stated in an article on this topic:\
\
In a litigious society such as ours, the ability of an agency to educate
prospective parents about the risks of international adoption and then
to ask them to accept those risk is indispensable to an agency\'s
ability to carry out its charitable purpose\...Put simply, the risks are
multiple and known; and absent an ability to require prospective
adoptive parents to a voluntarily accept the known risks, agencies may
be precluded from their critical mission of finding homes for children.\
\
Howard M. Cooper, \"Enforcement of Contractual Release and Hold Harmless
Language in Wrongful Adoption Cases,\" Boston Bar Journal May/June 2000.

Imposition of a statutory prohibition such as that proposed in the
Regulations is inappropriate interference with well-justified business
practice. This principle has been recognized by various courts who have
determined that exculpatory provisions in this precise context are
appropriate and consistent with public policy.  See Howard M. Cooper,
\"Enforcement of Contractual Release and Hold Harmless Language in
\'Wrongful Adoption\' Cases,\" Boston Bar Journal, May/June 2000 (citing
Forbes v. The Alliance for Children, Inc., et al, Suffolk County, Civil
Action No. 97-04869B; Regensburger v. China Adoption Consultant ltd.,
138 F.3d 1201 (7th Cir. 1999); French v. World Child, Inc., 977 F. Supp.
56 (D.D.C. 1997), aff\'d, No. 97-7167 (D. D.C. Cir. Sept. 10, 1998)).\
\
(c) Insurance Requirements\
\
The Regulations further mandate coverage at a prohibitively high amount
of insurance coverage - \$1 million per occurrence.  Proposed Reg. Sec.
96.33(h).  This is inappropriate for several reasons.  First, it is
already impossible for many agencies to procure professional liability
coverage. Our agency has been seeking to renew or purchase a policy for
several weeks and we have been met with denials notwithstanding our
excellent service record, well-drafted contract, and broad charitable
immunity available in our home state. (See letter from insurance broker
attached hereto).

Second, the level of \$1 million is extraordinarily high given the type
of compensatory damages most parents could seek. Adoption expenses will
rarely rise above \$30,000, and much of these expenses are not setoff
against government tax credits and employer contribution benefits.
Adoption agencies are not performing surgery. This high floor is
uncessary.

Third, we reiterate our comment that the drafters are inviting
litigation from adoptive parents who otherwise would not have such a
large policy to pursue. The proposed liability statute, coupled with the
high level of insurance coverage, will open the floodgates to litigation
by parents seeking to pursue a deep pocket due to their disappointing
experience. Wrongful adoption suits based on the Hague Regulations could
become the next automobile personal injury for the legal community,
which could mire agencies in a future of unlimited and groundless
lawsuits.

\(d\) Additional comments

We appreciate the encouragement of the Department of State to provide
the agency point of view on these issues.   The sections of the
Regulations discussed herein strongly suggest to us that the drafters of
certain of the Proposed Regulations have served as the sounding board
for advocates of a vocal minority of adoptive parents who either
experienced a disappointing result or were truly victimized by unethical
international adoption agencies.  Like every industry, the international
adoption industry has its bad apples and war stories.  We all recognize
them and are ashamed when our colleagues give into greed or dishonesty
when dealing with vulnerable adoptive parents.

We would, however, respectfully ask the Department of State to also
factor into its assessment the real world circumstances that the
legitimate agencies are now being asked to police.  Indeed, the same
circumstances that lead to children becoming available for international
adoption create the inherent risk in the process, such as birthmothers
abandoning children due to extreme poverty, lack of adequate care and/or
ability to receive and provide care for a child -- usually with some
degree of substandard both pre and post natal care/nutrition, possible
undiagnosed genetic conditions, etc\...  The term \"abandonment\" alone
dictates that often very little information may be known about a
child\'s medical history or genetic disposition.  Orphanage workers are
usually not skilled, trained medical professionals, but often volunteers
or low-paid labor providing basic care only.  Orphanages staff spend
their time and resources in meeting the basic life-sustaining needs of
the children and are usually ill-equipped to focus on extensive and
accurate medical evaluations and diagnosis.  In many instances, adequate
testing to determine true levels of physical, development and/or
emotional delays is not readily available in third world countries, too
cost-prohibitive for underfunded orphanages, or is viewed as an
unnecessary expense to waste on the country\'s unwanted children.  These
are the real world circumstances that agencies and adoptive families
face everyday and why agencies rely upon informed waiver provisions as
an appropriate means to move forward in accomplishing their missions.

We would further respectfully ask that the Department of State consider
the precarious position of agencies in relation to the adoptive
parents.  The adoptive parents may come to the process influenced
negatively by other factors that have nothing to do with their agency.
As one author stated:\
\
Passions run high in these \[wrongful adoption\] cases.  Often, they\...
involve parents whose emotions were already rubbed raw by not being able
to have their own children.  Many then faced a legal obstacle course to
adopt.  Gradually realizing that their long-awaited child has physical
or mental problems can be the last straw, emotionally.  What\'s more, to
prove their case \[against their agency\], parents must often argue that
they would not have adopted the children if they had known the truth."\
\
Wall Street Journal, December 7, 1998, \"Are Adoption Agencies Liable
for Not Telling All?\" cited in Howard M. Cooper, \"Enforcement of
Contractual Release and Hold Harmless Langue in \'Wrongful Adoption\'
Cases,\" Boston Bar Journal, May/June 2000.  Arming emotionally-charged
parents with a target for their blame and despair will only fuel the
litigation crisis further and lead to a counter-productive result.\
\
The international adoption agency community would like the Department of
State to recognize that the vast majority of us are in this industry for
the right reasons - to bring together children living as orphans in
dangerous conditions in foreign lands with able parents who want to
nurture them. And we are proud to report that that the success stories
far outweigh the tragedies.  In fact, considering that international
adoption has brought almost 160,000 children to the United States for
adoption from foreign countries since 1989, the tragedies are remarkably
few.  See State Department Website,
<http://travel.state.gov/orphan_numbers.html>.

We believe that the proposed liability structure of the Hague
Regulations will throw the baby out with the bathwater and go far
beyond, and run counter to, the purpose of the Hague Convention.  It
will not only prevent the tragedies but it will destroy the ability of
Americans who seek to grow their families through adoption to do so
because they can\'t afford the cost of the few agencies that were able
to stay in business.   And, of course, imposition of these impossible
standards will have a tragic effect on the very children who the
agencies, and the drafters of the Hague legislation, seek to help. \
\
3. Proposed Alternative Solutions\
\
The Hague Regulations can accomplish the purpose of the Hague
Convention, and even some of the new purposes that apparently were added
when drafting the Hague Regulations, by striking the following
provisions:\
\
(i) Strike sections 96.45(b)(8) & (c) and 96.46(b)(9) & (c) - These are
the key provisions which assign all risk between adoptive parents and
their service providers to the service providers, and channel that
liability to the primary providers;\
\
(ii)  Strike section 96.39(d), which ties the agencies hands from
sharing any risk within\
the process with adoptive parents by prohibiting informed waiver
provisions.  Waiver provisions should be permissible if the agencies
educate their clients about known risks and parents knowingly decide to
undertake such risk; and\
\
(iii) Strike section 96.33(h) - Requiring \$1,000,000 per occurrence of
insurance coverage. Insurance at this level should not be a requirement
unless the Department of State can propose a reasonable amount of
coverage that is reasonably related to compensatory damages and will not
encourage litigation, and until the Department of State can guaranty the
availability and affordability of such policies.\
\
As stated previously, the justifications for these provisions are
accomplished effectively and appropriately by other provisions in the
Regulations.  The requirements of sections 96.45 and 96.46 (without
sections 96.45(b)(8) and (c) and 96.46(b)(9) and (c)) accomplish
effectively the drafters\' desire to gain control and supervision over
supervised providers here and abroad. The provisions are bolstered by
Subsection J, which demand that all agencies conduct themselves with the
highest of standards or risk losing their reputations or, worse, their
licenses and/or accreditation.\
\
The requirement for insurance coverage and prohibition against waivers
forces the agencies to accept substantial risk that could effectively be
spread throughout others in the process.  Parents should be able to make
a knowing decision that they can or cannot afford to accept known
risks.  Agencies should be able to pursue their charitable purposes
without the threat of constant litigation.

As alternatives to retain some of the protections that the drafters
proposed by the stricken provisions, we propose that the drafters ask
the insurance industry to analyze underwriting international adoption
insurance policies for parents to individually defray the known risks of
international adoption.  Insurers cover domestic adoption risks, as well
as travel insurance risks.  It is not a far stretch for insurance
companies to cover the risks associated with foreign adoption and not
unreasonable to ask that the parents pay insurance premiums if they want
the added protection from financial loss in the event of a disappointing
result.\
\
Finally, to the extent that the drafters wish to create some scheme that
would allow financial compensation in the event of a tragic result, we
believe that the agencies, under the administration of the State
Department or some other governing body, might develop and implement a
claims mechanism similar to what is used by other professionals in other
industries.  For example, many state bar associations have a Lawyers\'
Fund For Client Protection.  Law firms remit annual \"dues\" and,
basically, commit a predefined amount of resources to cover the misdeeds
of the dishonest lawyer in the community.  Of course, there would need
to be a claims process that would require the claimant adoptive parent
to demonstrate need, and a governing body to determine if the standards
are met.  But this may be a compromise with which the industry, the
adoptive parents, and the needy children of the world can actually live.

Respectfully submitted,

Reaching Out thru International Adoption

Deborah E. Spivack, Esquire, Executive Director

Jeannene Smith, Founder