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Today a federal judge ruled that Attorney Kenneth Feinberg, the “mediator” handling the the claims against BP as a result of the Gulf Oi Spill, is not independent of BP and must stop presenting himself as such. In other words, the judge ruled that Feinberg is not acting as a mediator of claims, as initially stated when he assumed his role, but more of a claims adjuster – an agent of BP. (more…)
Posts Tagged ‘bp oil spill’
Judge Rules: BP Claims Czar Kenneth Feinberg Is Not Neutral
Wednesday, February 2nd, 2011
Feinberg Suggests: More Oil Funds Could Be Needed
Thursday, July 15th, 2010During CNN’s State of the Union on Sunday, July 11, Kenneth Feinberg, named by President Obama to oversee the BP Oil Spill claims process, suggested that the current $20 billion fund to compensate for losses due to the Gulf Oil Spill, may not be enough. He references the ongoing status of the spill; as the spill continues existing losses grow and new damages occur. Feinberg suggests:
Until the oil stops, you don’t know how pervasive the oil spill will be, so you don’t know if somebody who has not been harmed at all today will be harmed by additional oil next week.
Feinberg did suggest that once the oil well is capped and the spill stopped, “…I believe we’ll be able to very quickly get a handle on the comprehensiveness of the claims population.”
44% of BP Oil Claims Incomplete?
Wednesday, July 14th, 2010Earlier this week, CBS News was one of numerous news groups reporting that:
BP has decided to reduce payments to tens of thousands of people whose claim files are incomplete, the secretary of Louisiana’s Department of Children and Family Services said. Full Story
It is important to note that 40,000 claims amounts to approximately 44% of 99,000 claims filed.
Information about eligibility and filing claims with BP can be found on BP’s website (new window will open).
Mediating Oil Spill Claims
Tuesday, June 15th, 2010It seems that everywhere you turn – even official sources like our president Barack Obama, BP CEO Tony Hayward, or US Coast Guard Admiral Thad Allen – everyone it talking about the “independent mediator” that BP is “hiring” or in their own words “appointing” to address claims not resolved satisfactorily by BP Oil Spill Claims Process.
Unfortunately if this is occurring it seems far less than transparent. Which causes our original concerns to come to mind:
Although mediation can, without a doubt, be helpful in the resolution of claims related to damages from the oil spill, it is imperative that the tenants of mediation be upheld.
- Mediator Neutrality – By appointing the “independent mediator”, is not BP exerting primary and initial influence on the mediator? Parties in conflict who choose mediation ideally have equal say in who is the mediation provider. This is one of the basic means of ensuring that the mediator is truly a neutral participant.
- Power Equity – It is hard to imagine a fisherman, small restaurateur, the widow of a rig-worker, beach-front property owner, or even coastal town government having equal power in a dispute with the multi-national and heavily moneyed BP. Most losses attributed to the spill, while huge to the claimant, are dwarfed by the annual profits of BP (which BP reported to shareholders as $16.5 billion in 2009). For mediation to be successful, this inherent inequity must be addressed in the design of the BP mediation program.
- Voluntary – Participation in mediation is voluntary. Generally anything that can be litigated can be mediated – resulting in a resolution that is more satisfactory to both parties. However, BP is in a position of addressing thousands of claims from people who have experienced a loss or hurt from what they see as a result of decisions or actions of BP. It is likely that claimants will see themselves as “victims” of BP. Filing a claim and seeking a settlement through mediation as opposed to traditional litigation may not be the claimants first choice. Participants may find themselves in mediation without fully engaging in the process and/or voluntarily participating.
Although these are significant obstacles to mediation, BP can create a “Mediation Program” to address the damage claims resulting from the oil spill that results in claims being resolved in a “win-win” manner while still assuring BP’s continued viability in the field and the region.
Mediation Engaged to Respond to BP Oil Spill
Monday, June 14th, 2010
Late in May, while hope remained that the “Top Kill” effort to stem the leak was working, BP announced that it would be appointing a mediator to facilitate claim resolution.
BP announced that it will appoint an Independent Mediator to review and assist in the claims process for the spill associated with the exploratory well that was being drilled by the Transocean Deepwater Horizon in Mississippi Canyon, Block 252.
Although mediation can, without a doubt, be helpful in the resolution of claims related to damages from the oil spill, it is imperative that the tenants of mediation be upheld.
- Mediator Neutrality – By appointing the “independent mediator”, is not BP exerting primary and initial influence on the mediator? Parties in conflict who choose mediation ideally have equal say in who is the mediation provider. This is one of the basic means of ensuring that the mediator is truly a neutral participant.
- Power Equity – It is hard to imagine a fisherman, small restaurateur, the widow of a rig-worker, beach-front property owner, or even coastal town government having equal power in a dispute with the multi-national and heavily moneyed BP. Most losses attributed to the spill, while huge to the claimant, are dwarfed by the annual profits of BP (which BP reported to shareholders as $16.5 billion in 2009). For mediation to be successful, this inherent inequity must be addressed in the design of the BP mediation program.
- Voluntary – Participation in mediation is voluntary. Generally anything that can be litigated can be mediated – resulting in a resolution that is more satisfactory to both parties. However, BP is in a position of addressing thousands of claims from people who have experienced a loss or hurt from what they see as a result of decisions or actions of BP. It is likely that claimants will see themselves as “victims” of BP. Filing a claim and seeking a settlement through mediation as opposed to traditional litigation may not be the claimants first choice. Participants may find themselves in mediation without fully engaging in the process and/or voluntarily participating.
Although these are significant obstacles to mediation, BP can create a “Mediation Program” to address the damage claims resulting from the oil spill that results in claims being resolved in a “win-win” manner while still assuring BP’s continued viability in the field and the region.
AEHR Concerned About BP Claims Processor: ESIS
Friday, June 11th, 2010
Advocates for Environmental Human Rights (AEHR), a nonprofit, public interest law firm, has expressed concern that ESIS, the company that BP has chosen to manage the oil spill claims process, reports that the goal of its “Recovery Services” is to “reduce our client’s loss dollar pay-outs”.
Nolo.com reports that as of Thursday the 10th, BP reports 49,988 claims have been filed with current payment totaling $55.5 million. Although, not a paltry sum on it own, it averages out to $1,110 per claim filed. Although BP reports no claims related to the oil spill have been denied to date, Admiral Thad Allen did express concern to BP CEO Tony Hayward regarding the significant number of claims that have simply not been acted on.
Efforts are continuing to be made to increase transparency and accountability in the oil spill claims process both by BP and their claims processor ESIS.
Obama Administration Requests BP Oil Spill Claims Transparency
Thursday, June 10th, 2010US Coast Guard Admiral Thad Allen has requested more transparency from BP regarding claims processing.
In anticipation to his scheduled meeting with senior claims team members the next day, Adm. Allen wrote a letter to BP CEO Tony Hayward on June 8, asking for:
- Additional information to assess how well the [established claims] process is meeting the critical needs of individuals, families, and businesses whose livelihoods are being impacted by the spill.
- Access to the BP claims database with personally identifiable information removed (specific data and field requests attached).
- Discussion as to delayed processing times for large loss claims; pending claims with no action taken; and payment calculations for individual income losses.
- Information into continued payment plans.
- Information on the mediation plan BP is putting in place.
The full transcript of of the letter can be found here
BP Oil Spill Mediation…No News?
Tuesday, June 1st, 2010Although BP spoke of “appointing” a neutral mediator a week ago – there seems to no further mention of the planned mediation, much less how the plan will address the potential pitfalls to mediator involvement as designed by BP. Regardless of the appointee, it is paramount that the designated mediator be just that – a mediator, not an appeals levels claims adjuster.
For true mediation to occur the mediator must be a neutral person who is chosen by the parties – both parties. BP must create a program that supports this position not in name, but also program design. A mediator that works for one claimant, may not be the best mediator for another.
In addition, a person with a claim against BP is going to be hard pressed to experience any interaction with BP claims adjusters as one of equal power in the resolution. Mediation does not permit this power inequity. Mediation, even between individuals and BP, should be a focused conversation that addresses a plan for complete restitution – a plan that is deemed reasonable to both sides of the claim.
CFR is available to mediate claims against BP for damages related to the Gulf of Mexico Oil Spill, our focus remains on the promotion of efficient, effective, and fair resolution of issues.
