With Christmas Coming, Spill Victims Take Risky “Quick Pay” – or “Go Away” – Claims Option


As expected, the Gulf Coast Claims Facility offer of a quick $5,000 only days before Christmas has proven popular, placing the BP compensation fund into the same ignoble category as those much-scorned check-cashing outlets and payday loan companies. The “quick pay” option is getting cash into people’s hands, but it requires recipients to sign away their right to sue BP in the future.

The “quick pay” – or “go away” – plan, which offers $5,000 to individuals and $25,000 to companies that already received emergency payments, will drive up “final payment” numbers for Ken Feinberg with relatively small (5k) payouts to individuals. The Press-Register in Alabama is reporting that 5,000 claimants applied to the “quick pay” plan in the program’s first weekend.

Let’s not forget that since it took over the process on Aug. 23, the Claims Facility has paid out only $2.5 billion of the $20 billion BP fund – just over 10 percent. Since every day puts people and businesses into ever-deepening desperation, and ultimately bankruptcy, it’s no surprise that a quick-payment option looks good right now (particularly so close to Christmas). And by making the claims process such a crap-shoot, the Facility lessens chances that anyone will roll the dice on a “middle way” of continuing to file ongoing three-month claims.

It’s hard to prove if what we’ve seen so far is a planned strategy on the part of BP or just the difficulty of the situation. For Gulf residents, the long-term impacts of this process are unknown. After the initial popularity of these “go away” claims, we’re going to see some of these victims, possibly years from now, struggle with the repercussions of signing away their legal rights.

No doubt, the quick-pay option looks very attractive to victims who have been subjected to a long painful claims process. When the Facility offers $5,000 with “no questions asked!” that resonates with people who are worn down and desperate – and who have already answered plenty of questions to get their first BP payments.

Here’s the Press-Register story on what I hope was good news for some of our neighbors: http://blog.al.com/live/2010/12/claims_quick_pay_option_nets_5.html

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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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