Archive for Tuesday, August 10, 2010

39,000 oil spill claims in limbo

August 10, 2010


— Sheryl Lindsay’s wedding planner business is on the brink, crumbling with each cancellation over concerns about oil. Brides-to-be are walking away from plans for beachside vows, leaving Lindsay waiting to see whether she’ll be part of BP’s promise to make whole everyone who’s suffered from its spill.

BP said Monday it had received 145,000 claims from residents and business owners like Lindsay citing lost income because of the massive spill in the Gulf of Mexico, and had paid out $324 million without denying a single claim.

That sounds pretty good, until frustrated residents and officials point out that 39,000 claims are in limbo — some of them, including Lindsay’s, have been there for months. Some that have been paid are only partial payments, and many of those people are still fighting for more money.

“Therein lies the problem,” Mississippi Attorney General Jim Hood said recently. “They don’t deny them. They just hold them open forever.”

Hood speculated that BP PLC would rather wait for Kenneth Feinberg, the federally appointed administrator of the $20 billion compensation fund BP established at the behest of the White House, to take over the claims process this month. That way, if a claim is denied, “he’s the bad guy” instead of BP, Hood said.

BP claims director Darryl Willis said the company isn’t deliberately delaying. Rather, 26,000 pending claims are still being evaluated and thousands of others need more documentation, the company said.

“Our intent is to continue paying claims until this process is handed over to Ken Feinberg,” Willis said. “There’s no intent to slow this thing down.”

However, BP does defer “questionable” claims to Feinberg, including “restaurants and tourist claims from areas that haven’t been impacted by an oiled beach,” company spokeswoman Pat Wright said.

“We believe there are some tough decisions out there that need to be made on a variety of these claims because many of these are claims are not squarely within the guidelines of the Oil Pollution Act,” she added.

The act was enacted in 1990 after the Exxon Valdez spill in Alaska. Under the law, BP is responsible for cleanup costs, but the act caps the company’s liability for other economic damage, such as lost wages, at $75 million.

BP officials said early on that the company would not limit itself to that cap. But the company is using the guidelines for who should be compensated.

Wright said BP decided to defer some claims because Feinberg “has said that he’s going to look at this, maybe, a bit differently than we are looking at it.”

Feinberg, who oversaw payouts for victims of the Sept. 11 attacks, has said that claims without a direct tie to the oiled water will have a harder time making it through the process.


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