BP Oil Spill Claims Fund Not Independent, Judge Rules

The federal judge overseeing lawsuits stemming from last year’s Gulf of Mexico oil spill said yesterday that the head of the <"http://www.yourlawyer.com/topics/overview/BP-Gulf-Oil-Property-Claims-Rental-Property-Lawsuit-Lawyer-Class-Action">BP oil spill claims fund is not independent of the oil company. U.S. District Judge Carl Barbier ruled yesterday that BP cannot characterize attorney Kenneth Feinberg, administrator of the Gulf Coast Claims Facility, as “neutral.” According to a Reuters report, the judge also ruled BP must disclose in all communications that the Claims Facility and Feinberg are acting on behalf of BP in fulfilling its legal obligations under the Oil Pollution Act.

In the wake of the spill, BP agreed to provide at least $20 billion to compensate victims of the disaster, to be administered by Feinberg via the Gulf Coast Claims Facility. Claimants may accept interim payments without waiving any of their legal rights. Accepting a final payment of long-term damages requires claimants to release BP and any responsible parties. Claimants are able to Emergency Advance Payment(s) and reject the final payment if they find it to be unsatisfactory.

According to the Reuters report, Feinberg, who has held a series of town hall meetings in Gulf Coast communities impacted by the BP oil spill, often reminds potential claimants that they do not need a lawyer to take their claim to his fund. Judge Barbier ruled yesterday that BP must now tell claimants they have the right to consult a BP oil spill claims lawyer and explain they have the right to join the hundreds of pending BP oil spill lawsuits if they do not accept a final settlement.

The BP oil spill claims fund has so far disbursed around $3.5 billion. Earlier this week, the Associated Press reported that the Claims Fund has only paid one final settlement out of 91,000 final damage claims received so. That payment went to a company that has a business relationship with BP, and was paid by the Claims Facility after the oil company intervened on its behalf.

The Associated Press also pointed out that that half of the 484,000 claims filed have been denied because of ineligibility or lack of documentation.

The slow payment of BP oil spill claims has prompted the attorney general in Mississippi to file a motion with Judge Barbier “to compel BP to cure its failure to provide a claims process that fulfills the requirements of the Oil Pollution Act of 1990, state law and prior public commitments of BP.” The week prior, Jim Hood had asked the court to allow the state to take over the payment process.

Hood’s most recent filing argues that the Gulf Coast Claims Facility has paid out only a “paltry” amount to BP Oil Spill claimants. “Although the number of claims paid and the aggregate amount paid out by the GCCF seem large at first blush, the fact is that the number of victims is large, the amount of damages suffered is far greater than what has been paid and the number of claims not paid is staggering,” the filing said.

According to the filing, only 56 percent of businesses claiming an emergency payment received any money. A lack of transparency made it impossible to know whether those paid were paid adequately, or to determine if the fund’s statement that more than half of those denied payments failed to supply adequate supporting documentation were true, the filing said.

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