Oil Spill Claims Process Going From Bad to Worse?
BP claims administrator Kenneth Feinberg issued new rules for BP oil spill claims today. The rules will govern payments from the $20 billion escrow fund. The fund will begin accepting applications on August 23, 2010. Within hours of the release of the new rules, the attorneys general of both Florida and Alabama had written Feinberg to condemn the new BP claims procedures.
McCollum wrote: â€œthe current process appears to be even less generous to Floridians than the BP process.â€ He later added â€œthe process appears to have as its primary goal the reduction or elimination of claims, instead of making claimants whole.â€
King’s letter to Feinberg says: â€œBased on the lack of any forward progress made in your latest draft, as well as your actions and public statements since we met, it appears that the concerns of the Attorneys General and those of the citizens of our States have fallen on deaf ears.â€
One problem with the new rules is that they place heavy emphasis on proximity to the oil spill. Businesses which aren’t located on the beach, or very near to it, may be unable to collect anything from the fund even if they lost significant amounts due to the oil spill. McCollum wrote that Feinberg is imposing stricter limits than the Oil Pollution Act (OPA) imposes.
Some law firms are offering to file Feinberg’s paperwork for Gulf Coast residents and businesses, while simultaneously pressing ahead with oil spill lawsuits At least one leading plaintiffs’ firm is offering to waive its attorneys’ fee on the first payment clients receive from the fund (the “emergency’ payment for 6 months of losses).
Feinberg has stated that, after clients exhaust the 6-months emergency payment, he will make them a lump-sum offer. In exchange, the claimants will be required to release BP, Transocean and Halliburton. Given the fact that the future impact of the oil spill on the Gulf is still unknown, some have complained that it is unfair to ask them to fully release all defendants when it’s too early to accurately calculate their long-term damages.
I posted the following articles about Ken Feinberg’s new rules at BP Oil News today:
- Ken Feinberg â€“ New Oil Spill Claims Rules Blasted by Attorneys General
- Oil Spill Claims Rules Released by Feinberg