Is BP oil spill claims administrator Kenneth Feinberg being fair with victims of the spill? Someone at The New York Times seems to think so. Times business writer Joe Nocera recently sat down to lunch with Mr. Feinberg at NYC’s swanky Carlyle Hotel. The topic at hand was Feinberg’s current job, as overseer of the fund designated for paying BP oil spill claims victims. Since taking on the position (after being recommended by President Obama), Mr. Feinberg has borne the brunt of claims woes. He’s been accused of purposely dragging his feet on paying out claims, and was also recently accused of being paid off by BP – to the tune of nearly a million dollars a month.
400,000 people file for emergency claim payment
Since the spill ended and cleanup efforts began, Mr. Feinberg and the Gulf Coast Claims Facility (the organization in charge of accepting and paying out BP oil spill claims) have been reviewing claims applications for emergency funds. These are considered holdover payments, to help pay lost wages, cleanup costs and other expenses associated with the spill to people in need. So far, they’ve taken in over 400,000 claims from Gulf Coast businesses and residents. Of the $20 billion of BP money earmarked for oil spill victims, nearly $2 billion has already been awarded via emergency claims.
Lump Sum Payments to oil spill victims
The window on those emergency claims is about to close, however. On November 23rd, the emergency funds process of the claims cycle will end. After Thanksgiving, the remaining monies will turn to giving spill victims lump sum payments as a “one and done” solution for resolving damages. This is intended to avoid a costly and time-consuming class action litigation suit. “Look at the Exxon Valdez case,” said Mr. Feinberg. The Exxon Valdez spill took place in 1989, but victims didn’t receive payout for over 20 years due to a lengthy court battle. The award amount was reduced after judgment went out, and victims wound up with only about $15,000 each in damages.
80,000 claims still waiting a decision
So far, BP oil spill claims payouts are faring much better – an average of nearly $800,000 per paid out claim, according to data from the Gulf Coast Claims Facility. This is despite complaints that many people have received a reduced amount, or had their claims denied. He and the GCCF have said that many of the claims they’ve denied for emergency funds have been turned down due to fraudulent reasons. In interviews, Mr. Feinstein has also maintained that more than 80% of claimants have received the full amount requested. In the final days before the close of this phase of claims applications, nearly 80,000 emergency claimants are still awaiting a decision.
BP Final payment is what everybody is waiting for
The next round of BP oil spill claim applications, which will be for final payments, is expected to be expensive. This, says Feinberg, is intended to avoid the cost and frustration of a lengthy litigation battle that won’t be good for Gulf Coasters. “I have to offer them enough money that they’ll be willing to give up their right to sue,” he said. “A lot of people, and a lot of businesses are going to get a premium, no doubt about it.”
With the claims process already involving nearly half a million people and businesses, and more expected to file for non-emergency damages, coordination is bound to be difficult. Coordinating the process without a massive court battle stands to be even more of a challenge. While those affected by the oil spill might believe Feinberg and the GCCF are mishandling the claims process, it’s possible they’re just not seeing some of the behind-the-scenes work going on. As for Mr. Nocera, he believes that “until something better comes along, Mr. Feinberg’s is the fairest way to compensate the greatest number of people.”
Joe Nocera. “Justice for Spill Victims, Like It or Not.” The New York Times.
Just days before the November 23 deadline for BP oil spill claims to be filed as emergency relief claims, processing of existing emergency claims has slowed to a halt. Of the handled claims, many report having claims denied or only receiving a small fraction of their requested claim amount – as little as “pennies on the dollar” in some cases. This leaves many Gulf Coast residents and businesses with filed claims wondering when, or if, they’ll get paid.
You can file an oil spill claim for 3 years
Remember the November 23 deadline is only in regards to the Gulf Coast Claims Facility emergency payment claims, you can file an oil spill claim for the next 3 years with them and they would still have to process your claim. Also if you contact an attorney he would be able to file your claim against BP for you. This November 23 deadline is only a deadline that the Gulf coast facility has instituted for the emergency claim payment.
All eyes are on the Gulf Coast Claims Facility (or GCCF), the organization tasked with distributing the $20 billion of BP money earmarked for BP spill victims. Pressure is also on Kenneth Feinberg, the claims administrator in charge of the process. Since starting his run as overseer for the BP oil spill claims process, Feinberg has undergone significant scrutiny. Most recently, Alabama attorney general Troy King made public an accusation that Feinberg is actually in BP’s pocket – to the tune of $850,000 per month. While no facts have emerged on this claim, Mr. Feinberg has also declined several opportunities to comment on or refute AG King’s accusation.
Do your need an attorney if your claim does not get paid
In the event that Feinberg or other members of the GCCF were biased towards BP, it could potentially spell trouble for spill victims. Unfair handling or other loopholes designed to deprive victims of legitimate claims money is part of the reason a third party claims administrator was brought in in the first place, and not left in the hands of BP. In recent weeks, GCCF representatives have gone on record to say that the claims process has been slowed due to the organization being inundated with fraudulent oil spill claims.
BP Claim Payments delays again
Whatever the reason for the delays, many BP oil spill claims are currently going unhandled. With the clock ticking down on November 23rd’s deadline, nearly half a million emergency claims have been filed. According to data found on the GCCF’s website, there were 406,911 claims as of November 19th. Of these, only about 120,000 have been paid so far. More troubling, over 60,000 claims have been denied – more than 50% of the number of paid claims. The GCCF also claims that nearly 150,000 of the claims they’ve received had no accompanying documentation or require additional documentation before they’re processed.
Of the claims requiring additional documentation, there may be some internal confusion on their handling process. In an article on News Vindication, small business owner Jeff Whittaker said, “I filed a business claim the first week in October and have gone back and forth with the GCCF on what documents they need.” The Gulf Breeze, FL man also said, “I’ve contacted them by phone by email and gone down to the local office but no one can provide a definitive timeline on when I might get paid.”
Whether there’s an internal hiccup with the claims process or something more sinister is to blame, time’s quickly running out. With non-emergency BP oil spill claims starting to flood in following November 23rd, the GCCF will need to step things up to provide closure to the Gulf Coast.
Sources: Jennifer Cooper. “BP Claims Process at a Standstill as Deadline Approaches.” News Vindication.
“Overall Status Report.” Gulf Coast Claims Facility.