Florida Hopes to Settle BP Claims Outside of Courts

June 16, 2010

BP Plc has done a poor job settling oil spill claims quickly and efficiently but pursuing the claims in court might be worse, Florida officials said Tuesday.

Governor Charlie Crist and Attorney General Bill McCollum have assembled a panel to map out a comprehensive claims process to recoup state and local government losses from the BP oil spill, which is also affecting Louisiana, Alabama and Mississippi.

“This is not a preparation for litigation,” McCollum said as the panel met Tuesday. “It is a background where we could conceivably go to litigation on some day.”

Co-chairman Bob Butterworth said Florida’s best course of action would be to avoid a lengthy court battle similar to the federal case against the Exxon Valdez, the 1989 disaster that still has cases in the courts.

“Restitution is the most important thing to obtain as soon as possible,” said Butterworth, a former Florida attorney general. “We’ve learned from the Exxon Valdez that if we go to court it may take you 20 years.”

Co-chairman Jim Smith, another former attorney general, echoed the need for a “measured, level-headed response” in state and local government attempts to recover economic losses.

“Everyone’s natural reaction is to sue, sue, sue,” Smith said. “But the potential consequence of filing suit immediately is that BP stops compensating claims.”

State officials outlined a litany of initial BP missteps in the private claims process including a lack of communication with individual claimants, nonstandardized documentation requirements and erroneous statements on how quickly claims would be paid.

They said that led to confusion and angst among private claimants, many of whom were unaware that the claims were being handled by Esis, a Philadelphia company hired by BP. The claims processing and risk management company specializes in catastrophe services and is part of the ACE Group.

“The lack of information flowing from BP has led to much ill will,” said Bill Stewart, a staff attorney for McCollum’s office.

McCollum and others have asked BP to set up a $2.5 billion escrow account in Florida where tourism and fishing industries have been hurt by the spill.

“We don’t know long it’s going to take,” said McCollum, a Republican candidate for governor. “We don’t know the severity of it at the end of the day. What we do know is that we need a process. We need to be prepared.”

(Editing by Jane Sutton and Vicki Allen)

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