MOBILE, Ala. – Nearly 50,000 individuals and businesses have taken a “quick” final claims payment and signed away their right to sue anyone involved in the Gulf oil spill, though a free legal advice program promised by the claims operation is not yet fully functional.
The legal aid program will be up and running Friday, according to officials with the administrating agency, the Mississippi Center for Justice. Claims czar Ken Feinberg said he’s already referred 500 people to the program.
The quick pay option is part of the final claims process designed by Feinberg to distribute money from the $20 billion BP PLC agreed to set aside to pay spill damages.
It lets any of the 168,000 businesses and individuals who got money during the emergency part of the claims process get a final check — $5,000 for individuals, $25,000 for businesses — without further proof of damage. A total of 70,000 quick pay claims have been filed, according to claims facility data.
To get the money claimants must agree not to make additional claims or sue parties involved in the spill.
Two other options are available: final settlements, which cover all present and future damages and also require a lawsuit waiver; and quarterly interim payments, which don’t require a waiver. Both options require claimants to document their damages.
The lawsuit waiver has become controversial. Trial lawyers have argued that it is too broad. Attorneys general from Gulf Coast states have warned people to be cautious before signing it. Alabama Gov. Bob Riley has asked that the waiver be removed from the process altogether.
Feinberg said that he believes the quick payment option is popular because people have already been satisfactorily compensated for their spill damages or know they can’t prove further losses.
He also said it demonstrates that many claimants don’t have a problem with the waiver.
“When you have that many people choosing that option, they know what they’re signing,” he said Monday after a town hall meeting in Moss Point.
Joanne Doroshow, executive director of the New York-based Center for Justice and Democracy, called the large number of people signing waivers “an enormous problem.”
“It’s not possible that everybody understands it,” she said. “The whole process has been horribly confusing. I think some people are just giving up at this point because it’s been so burdensome to get anything from the fund.”
Doroshow’s group, according to its website, advocates for the right to trial by jury in civil cases, opposes tort reform and was “founded by consumer advocates to protect the civil justice system.”
Lawyers opposed to the waiver have said that people should be allowed to keep an option to go after BP for punitive awards and to sue other responsible parties for both compensatory and punitive damages.
“Everyone should have the opportunity and be encouraged to talk to independent legal counsel to assess what they’re giving up in exchange for a $5,000 payment,” said Steven Nicholas, an attorney with Mobile-based Cunningham Bounds who has been involved in oil spill litigation.
“There’s a real potential for punitive damages to be awarded in litigation,” he said, “and people are giving that up.”
Feinberg has argued that his operation will reward people with more money than the legal system, and do it more quickly. In addition, it’s a voluntary program, he has said.
If people don’t like the quick claim option or his final settlement offer, they can turn it down and file a claim with the Coast Guard or sue.
The free legal advice will be offered in conjunction with about a dozen other legal aid organizations on the Gulf Coast, said Sharon Garrison, a spokeswoman for the Mississippi Center for Justice.