Today marks the first day the Obama administration’s former executive compensation czar, Kenneth Feinberg, will begin processing compensation claims from Gulf Coast residents and businesses affected by the BP oil disaster. While many observers have hailed the decision to install Feinberg as the administer of the $20 billion fund, many Gulf residents are suspicious of some of the rules and restrictions Feinberg has instituted.
Chief among them is a rule stating that for the next six months, BP will not be indemnified against additional legal action from fund claimants–but that they will indeed lose the right to sue the oil giant in the event that they accepts a final settlement or any type of relief payment beyond that period.
Attorneys for some of the claimants argue that the long-term effects of the spill won’t be known in six months–and therefore that any estimate of income that Gulf residents stand to lose in the future will still be little more than pure guesswork at that point.
“Until we see the final plan and until reputable scientists can give us reasonable predictions about the sea life and the seafood industry, no suggestion of permanent or final pay can occur,” Jeffrey Breit — an attorney representing more 600 Louisiana fishermen — told The Upshot via email. “That final payment requires individuals and businesses to agree to a release of all future claims, long before plaintiffs will have a chance to fully assess the long-term damage to their fishing grounds…Who’s to say how long the Gulf Coast will be dealing with this disaster? This isn’t something that is going to go away over night. It’s on-going, and it can’t be solved with a permanent, one-time payment before we’ve had the chance to see the long-term damage.”
Florida Attorney General Bill McCollum also took issue with the rule, calling it “completely unacceptable” in skewing the legal playing field in BP’s favor. But Feinberg insists that the rule is fair and reasonable–and that, far from following BP’s prompting, he came up with the idea of the six-month threshold on his own.
“The goal here is to try and explain to eligible claimants: It is not in your interest to tie up you and the courts in years of uncertain protracted litigation when there is an alternative that has been created,” Feinberg said in a press conference on Sunday. “I am beholden to neither the administration nor BP. I am entirely independent.”
Meanwhile, Breit said he had other issues with the Feinberg plan. He suggest that the $20 billion fund could be used to cover costs besides claims payments — such as reimbursing state and local governments for cleanup response expenses — and that such outlays could prematurely drain the fund. Breit also contends that Feinberg’s set-up includes no mandate for BP to deposit additional funds into the account in the event that it’s not sufficient to meet all damage claims.
(Photo: AP/Gerald Herbert)