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Lawyer in Charge of Gulf Compensation Fund 'Acting in BP's Interest'
Judge's ruling could mean thousands will head straight to court
BP's attempts to quantify and quickly resolve billions of dollars in compensation claims from the Gulf of Mexico oil spill have been undercut by a ruling in a Louisiana court, which questioned the independence of the $20bn claims fund established by the British oil giant last year.
Kenneth Feinberg, the lawyer in charge of the fund, cannot claim to be neutral, a judge said, and is in fact acting in BP's interests.
The ruling throws open the possibility that thousands of people who suffered personal injury or lost their livelihoods as a result of the worst-ever oil spill might now bypass the claims fund and instead seek redress in the courts.
Analysts fear that protracted court action will dramatically increase the costs of the oil spill for BP, not least because of the legal fees involved. It also promises to prolong the uncertainty over the final bill for the spill. An estimated 5 million barrels of oil spewed into the ocean from a ruptured well for almost three months after a fire sank the Deepwater Horizon rig last April, hitting fishing, oyster farming, tourism and other industries along the Gulf coast.
At the height of the public anger over the spill in June, the White House pressured BP into setting up an independent claims fund, under the aegis of Mr Feinberg, the lawyer who previously oversaw claims to victims of the 9/11 terrorist attacks. However, Mr Feinberg's fees are paid directly by BP and he has numerous obligations to consult and provide information to the oil giant throughout the process, Judge Carl Barbier said. Mr Feinberg's firm is paid $850,000 [£526,000] a month for its work.
"A full disclosure of the relationship between Mr Feinberg, the claims fund and BP will at least make transparent that it is BP's interests... that are being promoted," the judge ruled.
Lawyers acting for thousands of claimants have been fighting Mr Feinberg's assertion that people would be better off seeking redress through his fund. They want as many as possible to join a class action against BP in the Louisiana courts.
"Today is a good day for the thousands of victims of the Deepwater Horizon tragedy," said Jim Roy, a lawyer for oil spill victims. "With this ruling, the court is protecting the rights of the thousands of victims of this preventable tragedy, and has unequivocally stated that Mr Feinberg no longer has carte blanche to mislead the public on BP's behalf."
BP's latest estimate of the costs of the spill at $41bn, including compensation for victims and the bill for fixing the well and cleaning up the oil. Earlier this week it reinstated the dividend for shareholders, after having axed it in the wake of the spill. It is trying to recoup many billions of dollars of the costs from its business partners, including other investors in the Deepwater Horizon project and its sub-contractors on the rig.
Mr Feinberg, meanwhile, has so far disbursed $3.5bn in compensation. Speaking before the Louisiana court ruling on Wednesday, he said he expected the Gulf coast to have fully recovered from the disaster within the next two or three years.
Local residents and politicians have rounded on Mr Feinberg, saying it is unfair claimants must waive their right to sue BP if they accept a claims fund settlement, and charging Mr Feinberg with underestimating the scale of the economic damage.
Mr Feinberg said he had "canvassed the universe" to reach a scientific consensus on the speed of recovery from the spill. "If people feel that I have misread the available data or have underestimated the long term data don't take the final payment," he said.
Who is Kenneth Feinberg?
Massachusetts-born Kenneth Feinberg considered a career in acting before studying law in New York in the 1960s. He now boasts an illustrious CV.
After a stint as Senator Ted Kennedy's Chief of Staff in the late 1970s, Mr Feinberg started his own law firm (now called Feinberg Rozen LLP).
Dubbed America's "compensation tsar", he is best known for handling the $180m (£110m) settlement between the manufacturers of Agent Orange and Vietnam veterans, the $7bn federal compensation fund for victims of 9/11 and the memorial fund for the families of victims of the 2007 Virginia Tech massacre.
In 2010, it was no surprise when President Obama named Mr Feinberg independent administrator of the $20bn compensation fund set up by BP for victims of the Gulf of Mexico oil spill.
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18 Comments so far
Show Alla wall street jew serving the corporate with a long tie with the zionist interests against the main street people.
that's an unthinkable exception!
Your religious slur is offensive and makes your comment meaningless.
q
quickstep...if it walks like a duck and quacks like a duck...it's a _________.
Gee. Another zionist troll trying to besmirch this site with staged anti-Semitism.
How original.
q
It is sooo obviously staged. Although. It could be a high school student having some fun. I think that often, in fact, with certain posters. Ringing doorbells and running away.....21st century style! And then some posters, it seems, are just the flip side of the tea party coin. Just a different spin on that ball. I notice that if they don't use all capitals, it's cool here.
"I'm proud to be an Oakee from Muskogee....."
i know no goddamn religious slur. you're projecting yourself too much.
That comment is beneath you.
Joe
A quote from the bible comes to mind about serving two masters:
"No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other."
So is his 'master' BP or those in need of relief?
The 'ethnic' slur that keeps on giving.
"---"
From the start they wanted to bury the rights of the people affected by this disaster in favor of corporate rights given by the supreme court. I just wonder if this ruling will get past Louisiana and really do the people some good? Tony
curious steve ...probably the most accurate succinct comment yet
It is the nature of the beast to take every advantage of marginalization of any and every expense, line of reasoning, time frame and evidence framework to serve shareholders.
It is an immoral, unsustainable, short sighted and ultimately necrotic configuration. Yes, it produces energy when it works, but it needs to be assessed with inclusion of externalized costs.
as GB shaw said, after 40, one is responsible for one's look.
but why do you say "deliberately stupid"?
he IS stupid, i'd say, if he thinks he can fool anyone with his face.
WHAT??
Am I mistaken, but wasn't there supposed to be money set up in an ESCROW FUND? That way BP could not turn into Exxon Valdez, and drag its feet forever...yeah 20-30 years is a long time, and lots of people died.
The court, should have BP put their money into that escrow account and Mr. Feinberg draws his money from that same account. ( although his billing is NOT part of the peoples' money) He won't have to see or talk BP at all. Otherwise, Mr. Feinberg, you have a big FAT conflict of interest, but hey, maybe the people should sue you after the settle with BP. YOU said 2-3 years, Mr. Feinberg, so stop holding up the people!
Secondly, let's take Mr. Feinberg at his word, that it should take 2-3 years. We know his billable amounts, so THAT is ALL you get Mr. Feinberg. The people can watch the amounts more closely that way and will also have a time frame. A time frame shouldn't be difficult, since BP can't say it didn't happen. All you have to do Mr. Feinberg is figure out what the amounts are. Please post this information so all the people concerned can see the game plan.
You may be from New York, but people in these states are not stupid, so stop being so rude. YOU should not be able to eat the entire amount and leave them with nothing..
The people can also see if Mr. Feinberg has done some Hollywood CREATIVE accounting. Put ALL the money into one place and BP stays out of it. You already ruined the Gulf, BP, so don't you dare start on those people now!
You know, take Mark Twain's advice..'Put all your eggs in one basket, and WATCH that basket!"
Kenneth Feinberg, the lawyer in charge of the fraud, should be Disbared, now.
those who would love to disbar him are already disbarred by his kind.