Court rules Feinberg fund not independent of BP
Kenneth Feinberg is not independent of BP and he must stop telling Gulf claimants that he is, ruled a federal court on Feb. 2, 2011. "The court finds that BP has created a hybrid entity, rather than one that is fully independent of BP,"said US district Judge Carl Barbier. The judge ruled that, from now on, BP must make clear that Feinberg and the GCCF are acting on behalf of BP’s legal obligations. Feinberg was appointed by the White House in the summer of 2010 to take over the claims processto victims of BP’s oil spill disaster. His Washington law firm has been paid $850,000 a month so far by BP to administer its $20 billion compensation fund through the Gulf Coast Claims Facility (GCCF). (Times Picayune)
Feinberg controversially encouraged individuals and businesses seeking compensation to opt for a “quick pay” option, requiring them to sign away their rights to pursue legal action against BP or receive any further payments. In numerous public appearances Feinberg has argued that claimants would be better off receiving this lump sum payment, rather than seeking compensation through litigation.
Lawyers in the Gulf Coast begin to express concern about this waiver of rights. They argued that claimants should be allowed to sue BP and its partner companies for punitive damages. Eventually the attorneys appealed to Judge Barbier to step in, leading to the court ruling.
Weitz & Luxenburg represents over 500 people in the Gulf Coast who are suing BP for financial compensation. We are one of the nation’s leading litigation firms.
A rare good day for victims of the spill
“Today is a good day for the thousands of victims of the Deepwater Horizon tragedy,” said Jim Roy, a lawyer representing victims of the oil spill, after the federal ruling was announced. “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.” (Bloomberg)
The ruling struck at the heart of one of Feinberg’s past arguments regarding disputed claims.
Previously Feinberg has argued that his decisions to deny or lessen payments should be trusted due to his independence from BP.
"While BP may have delegated to Mr Feinberg and the GCCF independence in the evaluation and payment of individual claims, many other facts support a finding that the GCCF and Mr Feinberg are not completely 'neutral' or independent from BP," declared Judge Barbier.
“A full disclosure of the relationship between Mr. Feinberg, the GCCF, and BP will at least make transparent that it is BP’s interests” that Feinberg is promoting as head of the fund, the judge continued in the 15-page ruling.
“The clear record in this case demonstrates that any claim of the GCCF’s neutrality and independence is misleading to putative class members and is a direct threat to this ongoing litigation, as claimants must sign a full release against all potential defendants before obtaining final payments.”
The court ruling also obliges BP to tell claimants that they now have the right to consult lawyers about adding their names to lawsuits, independent of the fund, for further damages.
“We have no comment on the ruling,” said Feinberg spokesperson Amy Weiss. “We are moving forward paying claims.”
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