BP Settlements May Shield Top Defendants, New York Times Reports

August 20, 2010

Those seeking a settlement from the BP $20 billion compensation fund may have to waive their rights to sue all major defendants involved with the Gulf of Mexico oil spill, not just BP, the New York Times reported on Friday.

Citing internal documents from lawyers handling the fund, the Times also said the payment plan stressed geographic proximity as a determining factor for claims eligibility.

Fund administrator Kenneth Feinberg declined to be interviewed about the documents but verified their authenticity, the Times said.

The fund’s protocol says workers injured or killed as a result of the April explosion on the oil rig are eligible to file claims, but a letter sent by BP’s lawyers to a lawyer representing some of those workers states otherwise, the newspaper said.

It quoted a letter from BP attorney John T. Hickey: “To be clear, it is BP’s position, consistent with this indemnification, that any settlement between Transocean and any of its injured or deceased employees must include a full release of all BP entities from any and all claims or liability in connection with the Deepwater Horizon incident.”

“This full release of all BP entities would indeed bar any subsequent claims against the fund being established by BP and the claims facility that will be administered by Mr. Feinberg,” the Times quoted the letter as saying.

Transocean operated the rig. Other parties include Halliburton, which was responsible for cementing the well, and Cameron International, manufacturer of the blowout preventer which was supposed to shut off the well.

The Times said the documents indicated that fishermen, shrimpers and seafood processors, as well as hotel and restaurant owners with beachfront property in areas where oil washed ashore, would have the easiest time getting compensation.

Businesses on the main highway to the beach — but away from the shore — would probably not be eligible, documents indicated. Experts said that could cut out businesses that were deeply affected by the spill, according to the newspaper.

Feinberg is to publicly release the protocol for emergency payments on Friday and the protocol for the final settlement in the fall. Documents show eligibility terms for both protocols will be almost identical, but the burden of proof to qualify for a final settlement payment will be higher, the newspaper said.

The fund protocol also includes a provision that property owners would not be reimbursed strictly for loss of property values, and there would be no reimbursements for those adversely affected by the Obama administration’s moratorium on most deepwater drilling in the gulf, the newspaper said.

It also said documents indicate there will be no reimbursement for people with mental health claims or businesses far from the spill that lost money because of government predictions the slick was headed toward their area.

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