Spill-Fund Recipients Can’t Sue BP, Companies Involved


Victims of the Gulf of Mexico oil spill won’t be able to sue any of the companies involved in the Deepwater Horizon disaster once they accept a final payment from BP Plc’s $20 billion compensation fund.

Kenneth Feinberg, the Washington attorney administering the Gulf Coast Claims Facility, released an outline today (Nov. 24) of how such final claims will be judged. The guidelines extend the liability waiver beyond BP to companies such as Transocean Ltd., which owned the rig that exploded in April, and Anadarko Petroleum Corp. and MOEX Offshore 2007 LLC, part owners of the well that ruptured.

Feinberg, whose handling of emergency claims has drawn criticism from residents and officials along the Gulf Coast, predicted that a “substantial number” of claimants would waive their legal rights and accept final payment as the gulf recovers from the biggest U.S. offshore oil spill.

“Ninety-nine percent of the fishing grounds are open,” Feinberg said in an interview today on Bloomberg Television. “There is shrimping. There is oystering. The tourism hopefully is returning. And people may very well decide, ‘We’ll take the lump-sum payment rather than come back again and again and have to document — document — past damage.’”

While yesterday was the deadline for filing claims for emergency payments, individuals and businesses can still apply for interim payments every three months and retain their right to pursue a final remedy in court. Only when accepting lump-sum payments from the compensation fund do they give up the option of suing BP and its partners and contractors. Requests for final payments must be filed within three years.

Back to the Fund

“You can come back to the fund as many times as you want and wait until you decide you want to file for a lump-sum final payment, if you ever want to do it at all,” Feinberg said.

The rules released today establish an appeals process for both claimants and BP.

The London-based oil company can appeal to a three-person panel claims approved by Feinberg if the award is in excess of $500,000. Most payments would be for less, Feinberg said.

“The great bulk of the claims — 98, 95 percent of them — BP has no right under the law or under my facility to challenge those claims,” he said.

Feinberg will choose the appeals panel from names selected by a “distinguished member of the legal profession,” according to the guidelines.

Spill victims who receive compensation in excess of $250,000 and who believe the total is inadequate also can appeal to the three-judge panel.

‘Emotional Ploy’

Separately, anyone seeking aid can appeal Feinberg’s decision, first to the U.S. Coast Guard and then in court. Only in accepting a final-lump sum payment do claimants waive their legal rights to additional compensation.

Jeffrey Breit, a Virginia attorney who said he represents more than 600 Gulf fishermen, said offering final payments during the holiday season amounted to an “emotional ploy” that may pressure claimants to accept the offers before damages can be adequately assessed.

“I’ve told my clients, let’s see what April and May brings,” Breit said. Feinberg’s emergency payments have been inconsistent, according to Breit.

He cited two of his clients who are brothers working on the same fishing boat. One received an emergency payment for $800 and the other for $18,000 with no explanation for the discrepancy, Breit said.

Feinberg also has been criticized by public officials who say emergency checks for their constituents affected by the spill haven’t come quickly enough or are smaller than anticipated.

‘Too Many Uncertainties’

“There are still too many uncertainties with respect to this disaster, and I lack any faith in your proclamations that those who have not been ‘made whole’ by your emergency claims process will have a continued opportunity with the interim payment process, and again in the final payment process,” Representative Jo Bonner, an Alabama Republican, wrote Feinberg yesterday.

In a separate letter to Associate Attorney General Thomas Perrelli, Bonner urged the Justice Department to investigate the compensation fund and oversee its operations.

“Thousands and thousands of people have been impacted by this spill, and there is a lot of emotion and there is a lot of concern,” Feinberg said today. “I think at the end of the day the program is working.”

The fund has paid more than 127,400 claims for a total of more than $2 billion, according to a status report dated yesterday. The fund has received more than 439,000 applications for emergency and final payments.

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

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