BP oil spill claims: Many complaints, few changes

By Catherine Clifford, staff reporter


NEW YORK (CNNMoney) -- Now it's official: The agency in charge of doling out payments to victims of last year's massive Gulf oil spill has come up with its final set of rules on who will get how much money, and it's barely changed from earlier versions.

The Gulf Coast Claims Facility has taken criticism from both sides -- the U.S. Department of Justice said it was being too stingy with BP's $20 billion oil spill recovery fund (and many victims agreed), while BP, which was responsible for last year's disaster in the Gulf of Mexico, said it was being too generous.

The GCCF, headed by Kenneth Feinberg, former administrator of the 9/11 Victims Compensation Fund, received more than 1,400 public comments in response to its draft proposal.

The changes to the final rules are relatively minor, although they could make a big difference for those affected by the tweaks. They'll come as good news to oyster processors, as well as victims who use accountants to help them file claims.

The final rules also promise to give claimants more data about the status of their claims, including how any payments were calculated and why.

They'll be bad news to local boat operators who helped with clean-up efforts, though; the final rules say boats used as part of a "Vessels of Opportunity" program can't get paid for any resulting property damage via the claims facility.

Under the new rules, oyster processors will now be eligible for four times their 2010 documented losses as a lump-sum payment. In earlier versions, only oyster harvesters could get that much.

Although the Facility's experts predict that the region will fully recover from the spill in 2012 (so claimants in most other fields are being offered a one-time check for double their documented 2010 losses), they estimate it will take oyster beds longer to return to normal.

The final methodology also offers to pay "reasonable costs" of claimants who work with an independent accountant on their claims, and to treat them as part of their losses. That offer should help claimants submit proper documentation to back up their claims; less than 17% had submitted completed 2010 documentation as of Friday, the GCCF said.

A big response

Feinberg issued his proposed rules for determining final lump-sum payments to oil-spill victims earlier this month, and opened up the criteria for public comment. In two weeks, he received 1,440 responses from individuals, businesses and public officials.

BP, for one, submitted a 24-page letter saying that the proposed methodology overstates the region's losses and that payments were too generous.

Others who submitted public comments -- mostly frustrated business owners and individuals -- complained they found the claims process unfair or overly complicated, or the payments insufficient.

In an outline of the final payment methodology, posted on the GCCF's website late Friday night, the agency said that it "has carefully considered all comments," and made changes in response.

Earlier, the GCCF said claimants could accept a one-time lump sum payment option, which requires forfeiting the right to sue, and be paid two times their documented losses in 2010. That number is based on the GCCF's assumption that spill-related losses will taper off this year and next, to 70% of 2010 losses this year and 30% of 2010 losses next year.

In the final protocol, the GCCF said it still thinks this logic is "fair and reasonable." Part of the reason some commenters were upset about the payment strategy, it said, was because they just didn't understand how payments were being calculated.

In response to the release of the final rules, BP said in a statement that it continued to believe "there is no sound basis" for paying victims double their documented 2010 losses, but added "we accept [Feinberg's] decision to utilize methodologies to which we have objected."

The protocol lays out the methodology for determining final, lump-sum payments, which require claimants to waive any rights to sue BP or any other responsible party.

It also details the methodology for claimants to receive interim payments, a stop-gap way they can be reimbursed for substantiated, past damages on a quarterly basis without forfeiting the right to sue.

The protocol doesn't cover all options for victims seeking money, though. For example, they might request a one-time "quick-pay" option without giving up the right to sue, or hire a lawyer and seek redress in the courts. Participation in the Facility is completely voluntary.

Now that the final methodology has been published, the Facility will begin making final and interim payments. Thus far, the Facility has paid out nearly $3.5 billion. To top of page

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