BP claims: Get paid 'quick' if you don't sue

By Catherine Clifford, staff reporter


NEW YORK (CNNMoney.com) -- People and businesses impacted by the BP Gulf Coast oil spill will now be able to receive a check almost immediately, so long as they give up their right to sue.

Gulf Coast Claims Facility Administrator Kenneth R. Feinberg announced the new "quick pay" program on Monday. Individuals can get $5,000 and businesses can get $25,000 without submitting any further documentation. However, a full release to waive the right to sue is required.

The "quick pay" program is available to the 166,000 individuals and businesses who have already received an emergency payment from the Gulf Coast Claims Facility, the independent organization in charge of the claims process. Claimants who are submitting claims for the first time or who have been denied for emergency payments are not eligible.

So-called "Emergency Payments," available for individuals and businesses that experienced financial hardship resulting from damages as a result of the BP oil spill, were accepted by the facility through November 23 and did not require claimants forfeit the right to litigate. Emergency payments will all be processed by Wednesday.

According to this new "quick pay" option, claimants who have already received an emergency payment can get an expedited final payment if they give up their right to litigate. Forms to apply for the program will be available by Friday. Feinberg will cut a check within 14 days after a claimant opts for "quick pay."

"One size does not fit all:" Including this new option there are three methods of receiving payment.

First, there's the final, lump sum payment, which also requires waiving the right to sue. There is no maximum for how much can be claimed in a final, lump sum settlement. Feinberg said some claims are "requesting double digit millions."

Interim payments are another. These are a stop-gap way for claimants to be compensated for substantiated, past damages on a quarterly basis, without forfeiting the right to sue. Interim payments do not cover any future, estimated damages and can be submitted once at the end of each quarter.

"One size does not fit all. Every claimant has to look at these options and decide what is best for the claimant," said Feinberg.

In particular, the new "quick pay" option may be attractive for claimants that can not come up with sufficient documentation or who already feel they have been sufficiently compensated and want to be done with the process.

"There may be many, many individuals and many, many businesses that have no further documentation that would be perfectly satisfied with the quick claim," said Feinberg. "It is designed to get readily quick cash to any claimant that for whatever reason feels that they are ready to accept $5,000 or $25,000 just to be done with all this."

Thus far, the Gulf Coast Claims Facility has paid about $2.5 billion to over 166,000 individuals and businesses. The facility has processed about 475,000 claims. Many claims were dismissed for woefully insufficient documentation: over 100,000 claims received have been submitted with no documentation at all, Feinberg said.

Kenneth Feinberg said in August when he took over the claims process that he would get checks out quickly to economic victims of the oil spill, and so far, he has been distributing money faster than BP did. In three months that Feinberg's facility was in charge, Feinberg paid out more than five times what BP paid out in four months following the spill.

Free lawyers, more bodies: The Gulf Coast Claims Facility will provide attorneys for any claimant that seeks help with the claims process. If a claimant decides to sue BP, however, they will not have access to the pro bono legal help.

Further, Feinberg will hire local Gulf Coast residents to work in his facilities to help claimants.

"I have listened to those claimants and others who have urged me to retain the services of respected local individuals who can be available to answer questions at the various Claims Offices throughout the Gulf," said Feinberg. "Their physical presence should make the claims process more transparent and consistent."

Also, in an effort to increase transparency for the final, lump sum payments, Feinberg will post on the GCCF web site a methodology in about ten days. "Inconsistent application of eligibility rules promotes criticism," said Feinberg. "It is very difficult to draw a hard and fast rule on the eligibility line. It is a tough call in some cases."

--CNN's Aaron Cooper contributed to this report.  To top of page

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