The Nov. 23 deadline has come and gone, and oil spill victims can no longer seek emergency payments from the Gulf Coast Claims Facility.
Under the new system, claimants can seek either interim or final payments. The latter option will require them to waive the right to sue BP, along with all the other companies that may be held liable for the blowout of the Macondo well (such as Halliburton and Transocean).
Accepting short-term interim payments rather than accepting a single lump sum as a way of dealing with what claims administrator Kenneth Feinberg often calls “the unknown future” could also have risks, he said this morning on a conference call.
The lump sums are intended to be large enough that claimants will accept them as a final settlement, he said. Lump sum payments may be lowered as economies improve and fisheries recover, so some claimants may decide they’re better off accepting the certainty that comes with a final payment.
“I hope that many will,” he added.
“Claimants will have a choice. They can accept a lump sum final payment for all present and future damage and surrender their right to sue by signing a full release, or they can continue to receive quarterly interim payments based upon documented past damage for that three month period; however, there is no guarantee that, in the future, a lump sum Final Payment will be as generous as it will be currently,” Feinberg said in a statement.
Before the fund starts doling out final payments, the top priority will be clearing the backlog of emergency claims, Feinberg said. The U.S. Department of Justice has given him a deadline of Dec. 15 to pay “legitimate and documented” claims, which he intends to meet.
How big is the backlog? According to statistics from the facility, nearly 440,000 claims have been filed so far. More than 127,000 of them have been paid, and nearly 70,000 have been denied.
Tens of thousands of claims (Feinberg said some 125,000) have no documentation whatsoever. Almost as many have “woefully inadequate” documentation, he said, such as those filed by fishermen who provided only fishing licences and no proof of their losses. Together, that accounts for approximately half of the claims filed with the facility, he said, and many of those will be denied.
For instance, claimants will be able to seek interim payments every three months. However, if they are “able to demonstrate the presence of exigent circumstances” (i.e. struggling to pay monthly bills), they can file more frequently.
Also, a letter from Florida Department of Children and Families Secretary George Sheldon reminded Feinberg of the White House’s promise that a three-judge panel would be available to hear appeals from claimants who felt they got short shrift.
Feinberg said there would be such a panel, though it would only be available to claimants whose payments exceed $250,000.
Other claimants unhappy with how they fared in the process could either appeal to the U.S. Coast Guard’s National Pollution Funds Center or consider filing a lawsuit. In short, Feinberg said, “They do have options.”
As for complaints raised about inconsistencies in how some claims were evaluated, Feinberg said that was bound to happen with a claims operation of such unprecedented size and scope, which has already paid some $2 billion to spill victims since it launched in late August.
“There are going to be inconsistencies,” he said. “There are going to be mistakes.” But, he added, there is still time to correct them.