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BP Oil Spill Compensation Fund Claimants May be Asked to Transfer Legal Rights

Nov 18, 2010 | Parker Waichman LLP

It’s already been determined that victims of the BP oil spill who accept a payment for final damages from the Gulf Coast Claims Facility will have to waive their right to sue the oil company. However, according to a Reuters report, claimants may also soon be required to transfer to BP their right to sue other defendants deemed to have partial responsibility for the disaster.

Those other defendants would include Transocean LTD., owner of the doomed Deepwater Horizon oil rig, and Halliburton Co., which performed cement work on the rig. 

According to Reuters, the proposal on the transfer of legal rights is part of a final set of rules being circulated by Kenneth Feinberg, administrator of the BP oil spill compensation fund. If adopted, the rule would still offer victims the opportunity for full payment for documented damages, Reuters said. If it is adopted, the rule could help BP’s efforts to collect billions of dollars from its partners on the Deepwater Horizon rig.

According to the Reuters report:

“Language in the draft proposal requires that claimants transfer, or subrogate, their legal rights to BP. Claimants would sign over their right to sue those responsible for the spill in the same way a car owner might when accepting an insurance payment after being hit by a negligent driver.”

That would enable BP to pursue its partners for a portion of the claims it paid.

Feinberg circulated the proposed rules to lawmakers and attorneys for comment, but he has made clear the decision to implement the rules will be his, not BP’s, Reuters said.

Over the summer, BP agreed to set aside at least $20 billion to pay economic loss and physical damage claims stemming from the BP oil spill. Feinberg, who had previously administered the 9/11 Victims’ Compensation Fund, was tapped to oversee the BP fund.

Businesses, individuals and government entities who suffered economic losses or physical injury as a result of the BP oil spill are eligible to file two types of claims: Emergency Advance Payments and long-term final damage claims. They have until November 23, 2010 to file Emergency Advance Payment claims for up to 6 months of economic losses or physical injuries. Claims forms for final payments must be submitted by August 23, 2013.

Claimants may accept an Emergency Advance Payment without waiving any of their legal rights. Accepting a final payment of long-term damages requires that claimants waive their right to sue BP or any of the parties responsible for the Gulf of Mexico oil spill.

Any Emergency Advance Payments will be deducted from any final long-term damage payment a claimant receives. However, it is important to note that claimants may accept an Emergency Advance Payment and still reject the final payment if they find it to be unsatisfactory.

Help filing claims and other legal assistance for the victims of the BP oil spill is available at

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