Southern California Edison (SCE) announced last month that it will launch a new Wildfire Recovery Compensation Program this fall, offering direct payments to victims of the Eaton Fire. Although it is welcome news that Edison is starting to take responsibility for the Eaton Fire, Altadena and Pasadena residents still have to be aware of the risks of this program.
How will SCE’s Eaton Fire Compensation Fund affect ongoing litigation? Will survivors have to choose between the fund and lawsuits? What about those with pending homeowner’s insurance claims?
In this blog, the California wildfire attorneys at Wisner Baum will answer the most crucial questions about the fund and ongoing litigation against Edison. If you have any questions or concerns about the Eaton Fire fund or a potential legal claim, don't hesitate to contact us today for a one-on-one consultation.
Call us at (855) 948-5098 or fill out our online contact form to speak with an Eaton Fire lawyer. Let us stand by your side and help you rebuild.
What is the Southern California Edison Compensation Fund for Eaton Fire?
Announced in July of 2025, the utility company's compensation initiative aims to provide expedited, direct payments to those affected by the Eaton Fire, which killed 19 people and destroyed more than 9,400 structures in and around Altadena and Pasadena. The program purportedly covers a comprehensive range of damages, including total and partial structure loss, commercial property loss, business interruption, smoke and ash damage, physical injuries, and fatalities.
However, this is not the first time a utility company has initiated such a program following a wildfire. Although no details of the program have been publicly released, the fact that the company shared news of the program outside the context of the ongoing litigation for the Eaton Fire raises questions as to the transparency and efficacy such a program will actually have.
SCE enlisted Kenneth R. Feinberg and Camille S. Biros, experts who helped design the September 11th Victim Compensation Fund, to consult on the program's structure. The program will be voluntary, with no application fees, administrative costs, or legal fees charged by SCE.
According to the utility’s announcement of the fund, people can participate with or without:
- A wildfire lawyer
- Insurance coverage
- A pending lawsuit
What remains unclear is whether fund participants will have to sign a waiver that effectively forfeits claims for damages in litigation if they accept compensation from the fund.
The program, which is “not an admission of legal liability,” is expected to launch in late 2026, with specific eligibility criteria and documentation requirements to be released later this summer (we will update our Eaton Fire page with this information once it becomes available).
Wildfire Attorneys Concerned Eaton Fire Fund Will “Pay Pennies to the Dollar to Victims in Need”
The announcement of SCE's compensation program has drawn criticism from our firm and other attorneys representing wildfire victims based on past experiences from previous utility-caused wildfires. In our experience, utility-sponsored programs typically result in significantly lower payouts than victims could obtain through litigation.
Wildfire lawyer Ari Friedman has filed claims for numerous clients who suffered significant losses in the Eaton Fire. According to Friedman, “utilities create these compensation fund programs to give the appearance of being the good guys, even though the funds end up shorting or undervaluing people’s actual losses. We are talking pennies to the dollar compared to what people may be able to obtain via litigation.”
Friedman notes that a similar compensation fund was established for victims of the Dixie Fire. “The payments made were not fast, and they were not full value,” Friedman says.
Will the Compensation Fund Affect Your Right to Sue?
This is perhaps the most crucial question Eaton Fire victims want to know before making any decisions about Edison’s proposed compensation program: What happens to your ability to file or continue a lawsuit if you participate in SCE’s direct payment program?
The answer is unclear at this time, and Edison has been notably vague about the specific terms and conditions for Eaton Fire victims.
According to SCE spokesperson Kathleen Dunleavy, individuals “can file a claim even if they are involved in active litigation.” This suggests that for those with pending Eaton Fire lawsuits against Edison would not automatically be disqualified from participating in the compensation program. SCE has further stated that “eligible individuals and businesses impacted by the Eaton Fire may submit an application through this program” even if they have already filed a lawsuit.
But this apparent flexibility may come with significant caveats that victims must understand. SCE says victims may be able to apply to both, but the critical question is what happens when people actually accept compensation from SCE's program?
This is a question SCE needs to clearly answer for victims to ensure they are fully and fairly compensated for their losses.
What Do Eaton Fire Victims Stand to Lose By Accepting Money From SCE Compensation Fund?
This is another important consideration: What will the “release” or “waiver” provision that typically accompanies utility compensation programs look like?
When wildfire victims accept payment from such a program, they almost certainly are required to sign a legal document that waives their right to pursue additional claims against the utility for the same damages.
This is where SCE's current lack of transparency becomes particularly concerning. The utility has not yet released the specific terms of what legal rights participants would be required to waive in exchange for compensation. Victims of the Eaton Fire cannot make an informed decision without these details, yet victims are likely to be asked to consider the program without knowing the fundamental terms.
Based on similar utility compensation programs, accepting payment from SCE's fund would likely require Eaton Fire victims to:
- Waive your right to sue SCE for the same categories of damages covered by the compensation program.
- Release SCE from liability for your fire-related losses, even if future investigations reveal gross negligence.
- Dismiss any existing lawsuits you may have filed against the utility.
- Forfeit your right to seek additional compensation even if the program's payments prove inadequate for full rebuilding
When Will the Waiver Take Effect?
This is yet another important part of the puzzle: When would you be required to waive your litigation rights? This could potentially happen in a variety of different ways:
Waiver Upon Application – Will people be required to waive their rights simply by applying, even before they know if they will be approved or how much they will receive?
Waiver Upon Acceptance – Will people be required to waive their rights when they accept a compensation offer, allowing victims to evaluate the proposed amount before giving up the right to sue?
Conditional Waiver – Will people be permitted to conditionally accept an offer while preserving their right to reject it and pursue litigation if the amount proves inadequate?
Again, SCE has not clarified which approach their program will take, leaving victims in the dark and unable to make an informed choice.
Double Recovery
One thing we do know about the Eaton Fire Fund is that victims cannot receive the same compensation from both the fund and litigation for the same damages. Victims are legally prohibited from collecting “double recovery,” meaning that if SCE's compensation program pays you for your property loss, you cannot then sue for the same property loss and collect again.
However, there may be damages that the compensation program fails to address but may be available through litigation, such as:
- Emotional distress and trauma
- Punitive damages
- Loss of use and enjoyment
- Diminished property values
- Economic losses not covered
What You Need to Know Before Deciding
You may be reading this and wondering what the bottom line is. We believe it’s this: given the ambiguity of SCE’s plan at this point, Eaton Fire victims should insist on complete transparency before making any commitments.
Specifically, you should demand clear answers to:
- Exactly what legal rights you would be required to waive in exchange for compensation.
- When the waiver takes effect - upon application, upon acceptance, or at some other point.
- Whether you can withdraw from the program if the compensation offer proves inadequate.
- How the program interacts with existing lawsuits and what dismissal procedures would apply.
- What categories of damages are covered by the program versus those that might remain available through litigation.
- Whether accepting compensation affects your ability to participate in any future legal action or settlements.
The fact that SCE has announced this program without providing these critical details can be seen as something of a red flag for potential participants. As attorneys, we believe no one who has been through the devastation that our clients and other Eaton Fire victims have been through should be expected to make such an important decision without complete information about what they are agreeing to give up in return.
Eaton Fire Lawyers – Free Case Evaluation
The relationship between SCE's compensation program and your right to pursue a lawsuit is not a simple either/or choice at this point because SCE has not fully informed victims. We are concerned that people face permanently trading away significant legal rights in exchange for what may be inadequate compensation.
And make no mistake; this trade-off is likely irreversible. Once you accept compensation and waive your litigation rights, it’s possible—if not likely—that you cannot change your mind if you later discover the payment was insufficient or if new evidence emerges showing SCE was grossly negligent.
Before making this decision, every Eaton Fire victim should consult with an experienced wildfire attorney who can evaluate your specific situation, explain the legal implications of each option, and help ensure that you make an informed choice that truly serves your long-term interests rather than SCE's desire to limit its legal exposure. We can help you with a free, one-on-one consultation.
Take Action Today – Call (855) 948-5098 or fill out our online case evaluation form to speak with an Eaton Fire attorney.
