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BP Set to Hand Over Control of $20B Gulf Coast Oil Claims Fund

On Monday, residents and businesses affected by the Gulf Coast oil leak will begin submitting their damage claims to the Gulf Coast Claims Facility, the new independent group that will take over the administration of BP’s $20 billion compensation fund.

Kenneth Feinberg speaks in Bayou La Batre, Ala.; Tom Bearden/NewsHour

Claims facility administrator Kenneth Feinberg said this week he intends to speed up the claims process, which until now has been administered by BP itself. Feinberg, a lawyer who also administered the 9/11 victims’ compensation fund, said that the facility will pay out qualified claims to individuals within 48 hours and to businesses within seven days.

“At 12:01 a.m. Monday morning there is no more BP claims. It’s over,” Feinberg told residents at a meeting discussing the change in Kenner, La., according to the New Orleans Times-Picayune. “BP claims are replaced by the Gulf Coast Claims Facility. It is independent. It is not part of BP. It is not part of the government. It is an independent program and I am beholden to neither of them. I am working for you.”

Beginning Monday, people will be able to submit their claims at 35 claims offices or online at the Gulf Coast Claims Facility Web site, which will go live Monday at 12:01 a.m.
For the first 90 days, the facility will issue emergency payments.

“Having the emergency protocol in place is the first step to helping the people on the path to recovery,” Feinberg said in a statement.

Those emergency payments will come with no conditions. But after Nov. 23, applicants will have to decide whether they want to accept a final settlement arbitrated by the claims facility. If they accept the settlement, they’ll waive their right to later sue BP. If they’re turned down by the facility or if they decide not to accept the settlement, they’ll still be able to sue.

Feinberg has said that he will be “more generous” than the court system. But some attorneys representing Gulf residents and businesses have criticized the timeframe set by the claims facility.

“Small payments will be grabbed by some, and then in the future they will have no access to justice. Which is sad but true,” Jere Beasley, a plaintiffs’ attorney in Montgomery, Ala., told the Associated Press.

A set of protocols released Friday provides more details about who will be eligible for compensation. The nine-page document spells out how to apply and how eligibility will be determined.

People and businesses will be able to apply for compensation for oil cleanup costs on their property, lost or damaged property, and lost profits or earning capacity. They won’t, however, be able to get compensation for lost property value.

One key criteria will be geographic proximity: Those who were closest to the spill, with homes, businesses and work on beaches where oil washed up, will be most likely to have their claims approved. Those who are farther away — for example, someone who owns a gas station or restaurant on a main highway leading to a beach town — will have a tougher time.

BP has received more than 142,000 claims from all 50 states, according to Bloomberg — some from out-of-state people who have business in the state.

“The farther away you are from the Gulf and the Gulf shore the less likely it is that you will have a valid claim,” Feinberg told Bloomberg. “But I will take a look at each claim.”

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