Late Friday, after two weeks of public comments, oil spill claims administrator Kenneth Feinberg released the new rules that will govern the process of repaying victims of last year’s gulf oil spill from here on out. #
The basic formula for calculating payments remains unchanged, but the announcement from the Gulf Coast Claims Facility offers some new details, including the documentation the fund expects from claimants. #
The rules group claimants into three categories: #
- Those in the immediate vicinity of the gulf shore, or those who have already received emergency payments — the claimants whose damages are easiest to prove.
- Those with a connection to the gulf economy, who will have to pass a financial test comparing their financial performance after the spill with the comparable period from 2008 and 2009.
- A group that includes “claims from businesses located many miles from the Oil Spill, and claims from businesses that do not appear directly dependent on Gulf resources such as dentists, veterinarians, and chiropractors,” who will have to provide documentation connecting their losses to the spill.
The new rules also outline the documentation that will be necessary for claimants in each group — something Feinberg promised last week when he was grilled by Florida lawmakers. As of Friday, when the new rules were posted, only 17 percent of claimants seeking interim or final payments had submitted adequate documentation, according to the announcement. #
Some comments received by the fund suggested that it was unfair to base payments on a comparison between the period after the spill with the two previous years. The historical comparison doesn’t allow for the assumption that business in 2010 — which some businesses were expecting to be a recovery year — might have exceeded those levels. #
The problem is that it’s difficult to prove that something that didn’t happen would have happened if it weren’t for the spill, as the Pensacola News-Journal noted in an editorial over the weekend: #
So we believe that even if Feinberg is overestimating the impact, and the required payments, that is exactly what he should do. He should err on the side of the victims, and if that means BP ends up paying more than it “rightfully” should, well, as we have written before, that’s what you risk when you create the largest man-made environmental disaster in U.S. history. #