Mr. Feinberg Returns to the Gulf Amid Ongoing Criticism of Claims Process


We’ll be seeing more fireworks this week as BP spill claims czar Kenneth Feinberg holds another series of Town Hall-style meetings along the Gulf Coast. He will not be well-received.

Clearly, every time Mr. Feinberg appears in public, it’s a chance for citizens to compare his actions with his words. And this time, Mr. Feinberg will be hit with a petition calling for him to step down for lack of performance, and that will no doubt get included as background in at least some reports on the meetings.

It’s also interesting that some articles, like the one in the Houma Today newspaper, are starting to cite a nationally recognized legal ethics expert who “looked into” Mr. Feinberg’s role. Stephen Gillers of the New York University School of Law, who provided Feinberg with his opinion that the claims chief is clearly “independent” of BP, has stressed that no “attorney-client” relationship exists between the oil company and the claims administrator.

Of course, that’s a hard position to accept in the Gulf where it’s widely reported that Mr. Feinberg’s firm is being paid $850,000 per month for its work.

And since at least some of the BP spill reporting this week will be about claims, let’s again note that the current tallies are meaningless. At first glance, it may sound like the Claims Facility is doing a fairly good job: “… 470,332 claims have been filed to date from all states affected by the spill, directly or indirectly. A total of 168,013 of those claims have been paid, in the amount of $2,941,546,976.96.” But “paid” does not mean paid in full or even a negotiated settlement. It just means a check was sent, and many claimants report getting pennies on the dollar. The Claims Facility does not report details of payment, and that lack of transparency in how the process works has been a point of contention for months.

This week’s fireworks will underscore these ongoing issues, and the lasting significance is that it will be one more example of an immensely difficult process that isn’t being handled well by many standards, except of course, BP’s. And who knows? The tipping point for fixing the claims process is essentially a political issue, and these things do add up. But we’ll doubtless be hearing also from some people who were paid – we were warned by our friends in Alaska that this would be the case as Big Oil creates a few “lottery winners” to offset the thousands of losers.

That way, the strategy goes: people remain quiet in hopes of being among the lucky few. But they won’t be the ones bringing the pyrotechnics this week.

You can check out the Houma Today report here:

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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