Oil spill compensation claims could soar over lawyer's links to BP

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.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksA special investigation by Andy McSmith
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Arts and Entertainment
Jay Z has placed a bet on streaming being the future for music and videos
Arts and Entertainment
Festival-goers soak up the atmosphere at Glastonbury
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Project Implementation Executive

£18000 - £23000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Chiropractic Assistant

£16500 per annum: Recruitment Genius: A Chiropractic Assistant is needed in a ...

Recruitment Genius: Digital Account Executive - Midlands

£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Web Developer

£28000 - £30000 per annum: Recruitment Genius: This company provides coaching ...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own