Chile rejects wildfire compensation proposal

In a letter sent Sept. 4, the Council of State Defense, or CDE, told the families’ lawyers that the council had decided not to approve the proposed transaction. According to the document cited by La Tercera, the council said the amounts sought were far above the ranges currently used by courts in “falta de servicio” cases and insisted that the fiscus does not accept responsibility for what happened.

That stance lands at the center of a broader battle over public-sector accountability after the wildfire, in which relatives argue that multiple state bodies failed simultaneously in prevention, early warning, coordination and emergency response. Their legal strategy rests on the claim that the disaster was not only catastrophic in human terms, but also reflected systemic institutional failure.

The families had already lowered their compensation demand by about a third in the second proposal they submitted on May 28. They said they based the figures on Chilean precedent, including the Antuco case and rulings tied to the Luchsinger-Mackay litigation, while seeking differentiated payments depending on the relationship between each victim and their relatives. The proposed amounts ranged from 20 million pesos to 200 million pesos in special cases.

For the state, rejecting the offer signals a hard line on exposure. The CDE said the requested sums exceeded judicial benchmarks and typical awards in service-failure cases, implying that any eventual payout, if one is ordered, should be materially lower than what the families are seeking. That could limit the government’s near-term fiscal liability, but it also increases the risk of a costly court fight and a ruling that may set a wider precedent for future disaster claims.

The dispute also has a political dimension. The families’ lawyer, Raúl Meza, accused the CDE of showing indifference to the scale of the loss and said the families would continue seeking both civil compensation and criminal accountability for officials linked to the response, including former government authorities and emergency agencies. He also called on President José Antonio Kast to intervene, invoking the precedent of former President Michelle Bachelet’s handling of the Antuco case.

For investors and policymakers, the key issue is not just the size of any eventual award, but whether Chile’s state liability framework for major disasters is becoming more contested and more expensive. A negotiated settlement would have offered certainty; the CDE’s rejection instead leaves open a slower process with legal, reputational and fiscal overhangs, while reinforcing scrutiny of how public agencies manage extreme emergencies.

The next test will be whether the families pursue broader claims in court and whether judges accept their argument that the fire exposed a chain of state failures severe enough to justify compensation above standard benchmarks.