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BP Asks Judge to Order Oil Spill Plaintiffs to File with Claims Facility First

Sep 14, 2010 | Parker Waichman LLP

BP doesnt want victims of the Gulf of Mexico oil spill to file lawsuits until they have first submited claims to the Gulf Coast Claims Facility.  Under BP's proposal, the fund would then have 90 days to pay the BP oil spill claim or reject it. Only if a claim was rejected would the claimant be allowed to file suit.

In court papers, BP and its partners in the Deepwater Horizon oil rig, including Transocean Ltd and Halliburton Co, argued that any lawsuits should be delayed until the “bedrock issue of whether a large number of the plaintiffs should even be before the court’’ is resolved.

The $20 bilion BP-funded Gulf Coast Claims Facility is being administered by Kenneth Feinberg. It has so far approved 13,462 claims and denied one.

More than 300 oil spill damage lawsuits have been consolidated before Judge Carl Barbier in U.S. District Court, Eastern District of Louisiana. If the judge goes along with BP's wishes, the litigtion will be delayed by months.

Understandably, plaintiffs oppose the move, and urged the court to begin expanded discovery next month. The plaintiffs want test trials to start in March.

The Claims Facility was set up to expedite payments to oil spill victims, but many complain that is not happening.  In fact, many claims seem to be in limbo. According to the Claims Facility's own numbers, 3,420 clims have been retuned  to the claimants with a request for more paperwork. The remaining 38,481 are waiting to be reviewed.

Feinberg has acknowledge that his staff is overwhelmed.  He said that he has 25 people working in shifts around the clock to review the claims, and they are able to get through an average of about 1,000 a day.

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