Lawyers make millions yet Holocaust victims get few thousand dollars each

The biggest beneficiaries of the hard-fought settlement for Holocaust victims will be the lawyers who negotiated it.

While the victims will receive between $2,500 (£1,780) and $7,500 each, 11 of the more than 50 lawyers involved in the case will collect fees in excess of $1m each.

The American government's chief negotiator in the talks, Stuart Eizenstat, denied that the discrepancy was unseemly or that the lawyers were snatching money from the victims they had represented. "There are widely held views that, somehow, the lawyers in these cases made out like bandits at the expense of the Holocaust victims,which is grossly untrue," he told The New York Times. The normal contingency fee, Mr Eizenstat said, was one-third of the settlement. In this case, the lawyers had agreed to split a sum that amounted to a bare 1.5 per cent of the total.

Among the highest earners are Melvyn Weiss of Milberg, Weiss, Bershad, Hynes & Lerach, a Manhattan law firm, who will be paid $6.3m, Michael Hausfeld of Cohen, Milstein, Hausfeld & Toll in Washington DC, who will receive $5m and Burt Neuborne of the New York University School of Law, who will collect $4.4m. A total of 51 lawyers were retained in a multiplicity of lawsuits brought on behalf of people drafted as forced labour by Nazi Germany. Most of the former labourers are now in their seventies and eighties, and many others died in the year it took to agree the final details of the settlement.

Agreement by German companies and the German government to create a joint $5.5bn fund to pay reparations was followed by months of legal wrangling in Berlin and America. The German companies wanted the settlement to be final, and enshrine a guarantee that they would face no further liability claims. This demand was finally met last month, when a series of outstanding claims was dismissed by US courts. The German Parliament is now expected to approve payments for the victims and the lawyers before its summer recess.

The first beneficiaries, who will include the lawyers, will reportedly receive their payments within the next month. Survivors of concentration camps or ghettos are eligible for the highest payments ­ $7,500 ­ which will be paid in two instalments: an initial payment of $5,000 and the balance after fund administrators establish exactly how many claimants there are. People not held in camps or ghettos but forced to work for German companies or the government could receive $2,500.