BP Oil Spill Claims Administrator Reverses Cleanup Pay Decision, But Problems PersistSep 22, 2010 | Parker Waichman LLP
The administrator of the BP oil spill claims fund has reversed a decision that was not very popular with some claimants. Ken Feinberg now says that the pay some commercial fisherman received for working on oil spill cleanup will not be deducted from their claims. The one-sentence announcement was posted Monday on the Gulf Coast Claims Facility Web site.
Following the April 20 explosion aboard the Deepwater Horizon oil rig that killed 11 men and set off the worst oil spill in US history, about 2,000 commercial fishing vessels and charter boats participated in spill cleanup via BP’s “Vessels of Opportunity” program. The program provided some commercial fisherman whose businesses were shut down by the spill with a chance to earn income.
Reportedly, BP claims representatives had told participating fishermen that the income earned from the program would not be deducted from their loss of income claims, but when Feinberg took over the process in August, he made the opposite ruling. Fishermen in the region complained that they felt misled, and U.S. Sen. Mary Landrieu, D-La, wrote Feinberg last week urging him to reverse course.
While Feinberg’s reversal will make thousands of commercial fishermen happy, it seems the BP oil spill claims process is still beset with problems. According to a report in the Press-Register, several business owners in Alabama are complaining that emergency payments issued by Feinberg are only a fraction of the amount requested. One wedding planner who specializes in beach weddings – a business that pretty much shut down this summer because of the spill – told the Press-Register that she requested $240,000 to cover six months’ worth of lost business, but received just $7,700. The decision on the emergency claim, which can’t be appealed, has left the business with no choice but to file for bankruptcy.
There are similar cases, according to the Press-Register. In one instance, the operator of a seafood restaurant received a check for $16,000 on a claim of $159,000. One accountant in Gulf Shores who has assisted hundreds of people with claims said not a single client has received their full request. None of those interviewed by the Press-Register were given any information about why the checks differed so substantially from their submitted claims.
As we’ve reported previously, the Gulf Coast Claims Center has also been criticized for taking too long to resolve emergency claims. When Feinberg took over in August, he promised the claims process would be faster than it had been when BP was handling claims. But earlier this month, he backed away from that promise, telling ProPublica that the lengthy and complex supporting documentation claimants are required to submit “requires careful scrutiny and attention to assure that each claimant will be afforded the benefit of the most generous payment.” Feinberg also told the New Orleans Time-Picayune that his staff was having trouble keeping up with fully documented claims. 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.
The Gulf Coast Claims Facility allows businesses and individuals to submit emergency claims for six months worth of losses. In addition, claimants can also apply for final payment of long term damages. While claimants don’t have to surrender their right to sue BP and other responsible parties if they accept emergency payments, they will have to give up that right to collect final damages. Decisions on emergency claims can’t be appealed.
According to information released by the Gulf Coast Claims Facility, it has so far approved 13,462 claims and denied one. It has sent 3,420 back to the claimants with a request for more paperwork. The remaining 38,481 are waiting to be reviewed.