BP Oil Spill Claims Process Difficult For Some

Posted in Alabama Maritime News,BP British Petroleum,Deepwater Horizon,Mississippi Maritime News on April 15, 2011

WASHINGTON DC – It is being reported that the claims process is difficult and puzzling for some businesses and workers who have filed claims against the BP $20 billion oil spill fund.

Almost one year after the disaster, some claimants from Alabama and Mississippi have reported that they have still not been paid while others with nearly identical circumstances have.

The seemingly arbitrary decision making process is causing much hardship for some business owners who have sufferred losses as a result of the oil spill.

The Huffington Post reports:

(Danielle) Thomas is an attorney with a legal-aid group that’s helping people navigate the sometimes-byzantine compensation process overseen by the Gulf Coast Claims Facility (GCCF), which administers payouts from BP to workers and business owners affected by the disaster. Nearly a year after the spill, she says a lot of Alabamians are still adrift and waiting for their checks.

A torrent of litigation followed the explosion of the Deepwater Horizon oil drilling rig in 2010 for which a $20 billion compensation fund has been established as a result. The fund is being administered by mediation lawyer Kenneth Feinberg in a process overseen by the Gulf Coast Claims Facility (GCCF).

So far, the GCCF has paid out on about 300,000 claims to the tune of almost $4 billion, but about 44,000 claims have been rejected due to inadequate documentation or insufficient proof of loss.

Still other claims remain in limbo even after the 90-day time limit of the claims process. Some claims have exceeded 110 days and have put many workers and businesses in a tight spot because they need the cash.

The Huffington Post article goes on to say:

Many claimants argue that the methodology for compensation is too rigid, gauged as it is on workers’ past wages rather than what they expected for 2010 and beyond. They also claim the system can be too arbitrary, with some claimants waiting on money when their colleagues, who seemed to work in the same capacities and at similar wages, have already received their checks.

Some claimants are being offered a “quick payment” option that offers $5,000 to an individual or $25,000 to a business on the condition that the parties relinquish their right to sue for further damages.

The Huffington Post article has this to say about that:

Some lawyers believe that claimants are being steered by GCCF claims processors toward these payments — something Feinberg has steadfastly denied. Legal-aid lawyers like John Jopling, whose Mississippi Center for Justice has heard from 535 claimants asking for help, worry that some workers are accepting quick payments out of desperation when they could have more money coming their way down the road.

The inducement on claimants to settle for quick cash can pose a problem for them later on down the line should they discover in the future that some losses were overlooked.