Majority of oil spill relief fund claimants settle for one-time ‘quick payment’

The New Orleans Times-Picayune reports that the majority of the 123,970 claimants receiving payments from the Ken Feinberg-run Gulf Coast Claims Facility have opted for a one-time payment -- $5000 for individuals, $25,000 for businesses. The hitch, though, is that the recipients of these payouts waive their right to sue BP later should more spill-related health issues or financial losses arise.

When Feinberg announced the option in December, he said that it was designed to expedite pending claims against the $20 billion BP escrow fund--and to spare claimants the paperwork and bureaucratic delays involved in processing larger claims. The claims facility is supposed to move through the one-time payouts within 14 days. The attorneys general of Louisiana, Alabama, Mississippi and Florida all denounced the plan, however, and urged residents not to settle their BP claims without first consulting an attorney.

And now some activists advocating on behalf of BP claimants contend that the claims facility had overloaded the conventional claims process with needlessly complex demands--a process that they say drives already frustrated claimants into opting for the one-time payment as the least-bad way of putting the whole ordeal behind them. At that point, activists say that the claims operations becomes curiously efficient, with staffers standing eagerly by to assist claimants who've elected to take the quick way out.

Reports the Times Picayune:

Craig Baab, a senior fellow for the pro bono legal advocacy group Alabama Appleseed, said the high number of quick payments brings the problem with interim payments into stark relief. He said fishers and other people who make their livelihoods on the Gulf don't have 90 days to wait for payment, and many of them are still wondering why they were denied an emergency payment ... Baab said he was disturbed to see that GCCF staff at a public meeting with Feinberg in Bayou La Batre, Ala., were not providing forms for interim claims, but were readily providing the final and quick claim documents.

"What happens if a hurricane hits two years from now and churns up a bunch of oil?" Baab said. "Am I going to tell people who might be affected by that to just take $5,000 now and be done with it? No. But that's the cost of doing business, I guess: $5,000 for one less potential plaintiff against BP."

Since Feinberg was first appointed to administer the claims operation last summer, he's been dogged by questions about his impartiality. Some legal scholars recently agreeing with a suit filed by plaintiffs attorneys alleging that the longtime mediator has been, in effect, acting as an attorney working on BP's behalf to reduce the company's financial losses.

(Photo: AP/Dave Martin)