As BP Oil Spill Emergency Claims Deadline Looms, Payment Denials Spike

With the deadline to file emergency BP oil spill claims just weeks away, it seems more people are having their claims turned down. More than 20,000 BP oil spill claims were denied in October, up from just 125 last month, according to the Gulf Coast Claims Facility. The reason, according to Kenneth Feinberg, the administrator of the BP oil spill claims fund, is a mountain of new filings that lack proper documentation, and some with out any proof of loss at all.

BP agreed over the summer to provide at least $20 billion into the BP oil spill claims fund to reimburse businesses, individuals and government entities for economic losses and physical damage sustained as a result of the Gulf of Mexico oil spill. They have until November 23, 2010 to file for an Emergency Advance Payment for up to 6 months of economic losses or physical injuries. Claims forms for final payments for long-term damages must be submitted by August 23, 2013.

Claimants may accept an Emergency Advance Payment without waiving any of their legal rights, while accepting a final payment of long-term damages requires that claimants waive their right to sue. However, they may accept an emergency payment, and later turn down their final payment if they find it unsatisfactory.

Feinberg told the Associated Press that since October 1, the Gulf Coast Claims Facility has received thousands of new claims for emergency payments, likely due to the impending deadline. Some of the 315,000 emergency payment claims are undocumented, he said, and he speculated that many are illegitimate requests by people who “sense a gold rush.” He also said the claims facility has sent about 30 potentially fraudulent claims to the Justice Department for investigation, and hundreds more are under review.

Feinberg also denied that the claims process is in chaos.

“I disagree about disarray,” Feinberg told the Associated Press. “There are discrepancies in claims based on documentation and your ability to demonstrate a connection to the spill and your damage.”

But some Gulf Coast residents whose claims have been denied say they are mystified by their rejections. One wedding planner in Orange Beach, Alabama told The Washington Post that she requested $240,000 for lost revenue because of beach wedding cancellations and received a check for just $7,700. She was not told a reason for the denial, and expressed frustration over the apparent secrecy.

While claimants who receive smaller emergency payments than requested can apply for more money in their final payment claim, it could be months before they receive that money. Many simply do not have the luxury of time, however. The wedding planner, for instance, told the Post that her business may have to file for bankruptcy because of the way her emergency payment claim was handled.

While BP oil spill claimants can file for Emergency Advance Payments on their own, it is becoming clear that legal assistance could be helpful. Help filing claims and other legal assistance for the victims of the BP oil spill is available at

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