Wednesday marks the first anniversary of the explosion of the Deepwater Horizon oil rig, and the oil spill claims fund is marking the occasion by tooting its own horn and dismissing its critics.
- Since August 23, 2010, the GCCF has received approximately 857,000 claims from over 504,000 individuals and businesses.
- Since August 23, 2010, the GCCF has approved approximately 300,000 claims for payment involving approximately 180,000 eligible individuals and businesses. During the Emergency Advance Payment (“EAP”) period from August 23 – November 23, 2010, the GCCF paid 169,035 claimants approximately $2.6 billion. Since then, the GCCF has paid an additional amount of over $1.2 billion to many of these EAP claimants as well as claimants who filed for the first time after the expiration of the EAP period.
- Since the end of the EAP period on November 23, 2010, the GCCF has received approximately 278,000 claims and has processed approximately 72% of all submitted claims. A claim is “processed” when the GCCF has made an offer of payment (to which the claimant has 90 days to respond), when the GCCF has made a payment, when the GCCF has sent a notice to the claimant of a deficiency in the proof and documentation submitted to substantiate the claim, or when the GCCF has sent a letter to the claimant denying the claim based on a finding by the GCCF that the claimant is not eligible for any compensation.
- Since August 23, 2010, the payment of claims breaks down as follows:
- Emergency Advance Payments – Approximately 169,000 individuals and businesses received Emergency Advance Payments of up to six months duration without requiring these claimants to release their right to sue or surrender any other legal rights. The aggregate value of these Emergency Advance Payments is $2.6 billion
- Quick Payments – 110,163 claimants (85,501 individuals and 24,662 businesses) have to date filed and accepted a Quick Payment of $5,000 for individuals and $25,000 for businesses, without any requirement that these claimants submit additional proof documenting their losses. This option is advantageous for claimants who have either already received appropriate compensation through the Emergency Advance Payment Program or cannot prove any additional damage arising out of the Oil Spill. Claimants accepting this Quick Payment option release their rights to either return to the GCCF for additional payments or file any other claims for costs or damages from the Oil Spill. The aggregate value of these GCCF Quick Payments made to date is $998,680,000.
- Final Payments – In the past eight weeks, 16,281 claimants (15,250 individuals and 1,031 businesses) have accepted a Final Payment Offer from the GCCF. In addition, the GCCF has made approximately 16,600 additional Final Payment Offers, which claimants have 90 days to accept or reject. Claimants accepting this option release their rights to either return to the GCCF for additional payments or file any other claims for costs or damages from the Oil Spill. The aggregate value of these GCCF Final Payments made to date is $222,183,102.
- Interim Payments – In the past eight weeks, 6,902 claimants (5,690 individuals and 1,212 businesses) have received an Interim Payment from the GCCF. Claimants receiving an Interim Payment do not release their rights and can return to the GCCF each quarter for additional compensation if the claimant can prove damage caused by the Oil Spill during the previous quarter. The aggregate value of these GCCF Interim Payments is $78,691,137.
Each eligible claimant – whether an individual or a business – can voluntarily elect any one of the three options referenced above (Quick Payment, Final Payment, Interim Payment). The GCCF takes no position as to which option is preferable for a particular claimant. This will depend on the circumstances surrounding each claim and the voluntary decision of the claimant as to which option is preferable. The decision is entirely that of the claimant.
- Those GCCF claimants who believe that the GCCF has erred in its determinations governing either eligibility or the calculation of damages have the option under OPA to submit their claim to the United States Coast Guard for independent review. To date, the Coast Guard has rendered decisions in 574 cases. In no case has the Coast Guard either differed with respect to the GCCF’s finding of ineligibility or determined that additional money was due a claimant beyond that paid to the claimant by the GCCF.
- Those claimants electing the Final Payment option will be paid two times their actual 2010 documented losses (4 times actual 2010 documented losses for oyster harvesters and oyster processors) less any amounts already received from the GCCF or BP. This formula of future damages is based upon expert opinion available to the GCCF and was arrived at after all interested parties had the opportunity to comment publicly on this proposed formula. Most critics commenting on the formula opined that it was not sufficiently generous; BP publicly opined that it was too generous.The GCCF reserves the right to modify its formula for calculating future damages if warranted as subsequent events unfold. The formula is based on a reasonable prediction — not a certainty – as to the future of the Gulf and a predicted timetable for full recovery. Any claimant who believes that the formula does not adequately take into account future uncertainty may elect the Interim Payment option, which permits the filing of claims quarterly for actual documented losses, delaying the right to file a Final Claim until a future date.
- There has been some public discussion concerning the disparity between claimant damages requested and amounts actually calculated and paid by the GCCF. But this difference in amounts requested versus amounts paid is not a fruitful subject for debate. Amounts requested by claimants very often bear no reasonable relationship to the damages actually proven; in one case a claimant submitted a claim demanding all $20 billion, while in another case a claimant demanded $10 billion. In general, amounts requested by many claimants are well out of proportion to the damage actually substantiated in the claimant’s submission to the GCCF. As a result, the distinction between the amount claimed and the amount paid is not a useful barometer of progress.
- The GCCF has expanded and enhanced the staffing of its 35 local claims offices in the Gulf in response to criticism that these local offices were unable to respond adequately to claimant inquiries about the status of their claims or how the damage calculations were made. These local claims offices are now staffed with accountants, GCCF claims adjusters, systems personnel and local liaisons from Gulf area law firms and claims administration firms retained to meet with claimants to explain the GCCF process. These personnel are able to meet with individual claimants and provide them the type of face-to-face assistance sought by claimants.
- In an effort to promote transparency concerning the claims process, the GCCF published for public comment on the GCCF website its Proposed Final Rules Governing Payment Options, Eligibility and Substantiation Criteria, and Final Payment Methodology. After reviewing all public comments, the GCCF promulgated its Final Rules on February 18, 2011, available on the GCCF website. These Final Rules detail the methodology used by the GCCF to determine both claimant eligibility and the calculation of damages. In addition, the Final Rules also provide GCCF correspondence to claimants detailing the specific reasons why the claim is ineligible or lacking necessary proof.The GCCF claims process is a unique, unprecedented attempt to compensate hundreds of thousands of eligible claimants who have suffered financial damage as a result of the tragic Deepwater Horizon Oil Rig explosion and Oil Spill. Both the volume and complexity of the claims pose a challenge to the efficiency and fairness of the claims process. The GCCF is accomplishing the objectives set out by the Administration and BP in establishing a payment program to compensate the victims of the disaster. The GCCF will continue to make whatever midcourse adjustments are necessary to promote expeditious resolution, transparency, and consistency of the claims process.