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Mediator takes reins on gulf oil spill claims

'No more beating up on BP,' Kenneth Feinberg tells claimants. Next week, he will take over from the oil giant the $20-billion fund for spill compensation claims.

August 19, 2010|By Kim Murphy, Los Angeles Times

Reporting from Houma, La. — Wayde Bonvillain, who makes his living selling Louisiana's tender softshell crabs, said Wednesday that his problem is he doesn't know yet how broke he is. How can he know, when crabs make their home thousands of feet down on the ocean floor, and now people are saying there's spilled oil on the bottom of the sea?

BP has offered him $143,000 for six years of lost earnings, he told Kenneth R. Feinberg, the mediator who next week will take over from the British oil giant a $20-billion fund for oil spill compensation claims. But, Bonvillain continued, who says the crabs are going to be back after six years? What if it's more like 100?

"That's $1.43 a day," he said. "We're finished. We're dead."

Feinberg, who oversaw the compensation fund for victims of the Sept. 11 terrorist attacks and was appointed by President Obama to handle the gulf oil spill disaster claims fund, pledged a new, responsive regime that would speed up review of applications from fishermen, tourism businesses, restaurant owners and other victims and pay out emergency relief for those who can document losses.

"No more beating up on BP. BP leaves the scene," Feinberg said at a meeting here with hundreds of spill claimants. "If you file an eligible claim and document it, we guarantee to process personal claims in 48 hours…. If you're a business and you've been waiting for months in a black hole with BP, you will get an answer within seven days."

Feinberg's pledge to fix claim delays, among the most festering issues of BP's disaster response, came as Coast Guard officials said engineers must do more testing before a decision could be made on how and when to finally shut down the well that released an estimated 4.9 million barrels of oil into the Gulf of Mexico.

Thad Allen, a retired Coast Guard admiral and the federal spill response chief, said crews planned to test the pressure at the top of the well before deciding when to finally connect the relief well and permanently seal the wellhead.

"This will be one of the final vital signs we'll need in order to make a determination on how to go forward," Allen told reporters. He did not give a new timeline for the final shutdown. Days before he had said it was likely to be done by the end of the month.

In Houma and Kenner, La., outside New Orleans, Feinberg's meetings set the stage for BP to end its oversight of damage claims and hand over responsibility to the new Gulf Coast Claims Facility, which will begin accepting new claims Monday at offices across the region.

BP has paid $368 million to individuals and businesses hurt by the oil spill, but faced widespread criticism over lost paperwork, tardy payments, misplaced checks, exhausting demands for paperwork and parades of adjustors who don't talk to one another.

"I must say BP in one sense did a pretty good job. They paid out over $300 million in claims, and they paid that separate from the $20 billion. I mean I give BP some credit," Feinberg said. "On the other hand, we can do better in terms of accelerating consideration of your claim, getting payments out faster, more generous … in a systematic way. You are not going to be pushed around by six, seven, eight different adjustors."

Those pledges, though, were largely for emergency relief claims — quick cash payouts intended to keep people from having homes foreclosed or businesses shut down.

Harder to determine will be cases like Bonvillain's, in which the claims fund offers, in addition to the emergency relief checks, permanent settlements for long-term damages. But those who accept the relatively speedy payouts must pledge not to sue later.

How, victims like Bonvillain demanded, can those payments be measured now, when the full extent of damage to the gulf is still unknown?

"They need money now. People are losing homes, they're losing businesses. But they can't be in a position where they have to choose between money now and giving up claims for future damages that may not show up until the future," said C. Gibson Vance, president of the national trial lawyers group the American Assn. for Justice.

Feinberg said it was not as hard as it sounded. One simply has to do the math.

"I'm in the claims business. I'm not in the business of getting oil out of the seabed," he told Bonvillain. "I will tell you this: If you file a claim and tell me you're not going to be able to get shrimp out of there for 100 years because there's oil on the seabed, and you've got experts to document that claim, then you will be eligible to claim the amount you would have made.... People in this room are overwhelmingly eligible."

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