New Gulf Oil Spill Claims Process Getting Underway

June 6, 2012

Thousands of victims of BP’s 2010 Gulf oil spill will participate in a new process for economic-loss and medical claims associated with the accident.

The Deepwater Horizon Claims Center, run by court-appointed administrator Patrick Juneau, will open 18 intake centers across the Gulf Coast next week to accept such claims. They will be paid based on the strict terms of a negotiated settlement. Its central offices are based in downtown New Orleans.

The Times-Picayune reports that a separate facility will also open to handle claims from coastal residents and cleanup workers who say they were injured from exposure to the spill.

Beginning Monday, anyone who suffered spill-related losses or injuries and hasn’t already accepted a final settlement from BP through the former Gulf Coast Claims Facility will be able to apply under the new process.

The new payment system was set up under the terms of a settlement reached this spring to avoid a trial on thousands of health and economic-damage claims by individuals and businesses harmed by the oil spill. The deal, preliminarily approved by U.S. District Judge Carl Barbier, was uncapped. That means there’s no limit on how much money is available to pay damages, though BP has estimated the cost at about $7.8 billion. The settlement was not an admission of liability by BP.

The new claims facilities represent both a break from and a continuation of the Gulf Coast Claims Facility, the entity run by Kenneth Feinberg from August 2010 through the settlement in March. Feinberg’s program paid out more than $6 billion of BP money to 225,000 claimants in those 18 months. Although the subject of much criticism from some local officials and unhappy claimants, it received generally high marks for fairness and efficiency from auditors hired by the U.S. Justice Department to review its performance.

A transition team headed by Juneau has paid another $313 million in two months to another 12,700 claimants who were already in Feinberg’s queue, mostly by sending them 60 percent of what Feinberg had offered them while leaving them the option to collect more under the new settlement process.

The new process is open both to those who had claims rejected by Feinberg and those who never previously sought payments.

Juneau, a Lafayette native, will spend next week meeting with employees at the new centers from Texas to Florida and the Hammond call center.

“I want this program to kick off in a friendly manner and assist people. I want (the staff) to pay all legitimate, eligible claims 100 percent of what they’re due,” he said. “This is not a negotiating matter. We are not trying to negotiate lesser sums.”

Juneau said he’s heard that claim center workers under Feinberg operated more like insurance adjusters, trying to approve the lowest defensible payments.

Some adjusters who worked for Feinberg’s operation and spoke to The Times-Picayune on condition of anonymity complained that they were not fully trained and that many workers were from outside the Gulf region. Juneau said he has insisted on highly qualified, well-trained and local employees.

He said he’s confident that if a claimant has all of his or her paperwork in order, including W-9 tax forms, then straightforward claims can be paid very quickly after a 30-day ramp-up period.

“If they’ve got material to substantiate their claim, it will be largely formalistic,” Juneau said.

However, there are still going to be some sticky claims that require accountants to figure them out. Claims based on complex profit and loss statements, as well as those from failed businesses and start-ups, will require a beefed-up accounting staff, Juneau said.

He also expects to get thousands of claims that are not eligible for payment because they don’t fall within the geographic limitations or come from industries excluded in the settlement.

Some excluded claimants have already challenged the settlement’s fairness. They include those claiming losses from the offshore drilling moratorium imposed by the Obama administration after the spill; BP-brand service stations that said their sales fell because of motorists’ anger at the company; or businesses in eastern Florida that claim they suffered from misperceptions about how far the spill’s effects reached.

And even a few groups who are covered by the settlement feel they are getting short shrift. They include charter boat operators who have to give back money they earned from BP during the spill cleanup, even though shrimpers don’t; and seafood processors, who are in the settlement but don’t fall under the same rules as actual seafood harvesters.

But in the end, anyone who doesn’t get what he wants from Juneau will retain the right to pursue his claims in court.

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