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Friday, August 20, 2010

How's That BP Oil Spill Fund Going?

In mid-June, when Obama went on television to announce that he would "inform" BP how much it had to contribute to a compensation fund for the Gulf oil spill, I predicted that the fund -- despite the grandstanding -- would not put much money in anyone's pocket anytime soon:
If the Constitution means nothing to you, and all you want is retribution, you will be left very unsatisfied.

The claims procedures apparently have not yet been worked out in detail. But if the 9/11 claims process is any indication, the process will not be fast. And claimants will be limited to compensation for economic losses, which will require that individuals give up whatever other claims they may have.

End result is that I would be surprised to see much money put in anyone's hands this calendar year.
I also predicted that the price of participating in the settlement fund would require giving up claims which otherwise might have entitled the participant to compensation:
No appeals, no second chances, not only for BP, but for individuals. The price of submitting to an arbitrary claims process is the loss of access to the judiciary and the legal process. That may be fine for many people, but it is a high price to pay as a nation supposedly of laws.
And so it is coming to pass, as The New York Times details in an article, BP Oil Spill Settlements Likely to Shield Top Defendants:
People and businesses seeking a lump-sum settlement from BP’s $20 billion oil spill compensation fund will most likely have to waive their right to sue not only BP, but also all the other major defendants involved with the spill, according to internal documents from the lawyers handling the fund....
Legal experts said that the eligibility criteria in the protocol, including the emphasis on proximity, make intuitive sense, but they will cut out large sectors of businesses and people that were indirectly but nonetheless deeply affected by the spill.
Read the whole thing, as it lays out the onerous claims forms, tight filing deadlines, and the near complete power rested in the hands of one man.

Is the claims fund better than the alternative?  Claimants have precious little time to figure that out.

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  1. I am waiting for the shareholder lawsuits contesting the establishment of the fund in the first place ...
    It doesn't matter if BP managers "agreed" to fund it. They have a feduciary duty to act responsibly for their company and shareholders.
    This was a shakedown pure and simple and now the chickens are coming home to roost ...

  2. The little people will never see any real money.
    The hotel and restaurant workers, the fishermen and tour guides and many others related to the fishing and tourism industry will be the last in line.
    If they really shell out $20 billion dollars it will be most likely broken up into blocks that would go owners of hotel groups,unions, politicians and casino owners, cruise ship companies and the such and they will take their slice off the top and throw the crumbs on the floor.
    It will go to people who can give a lot of it back to campaign funds or who can organize GOTV
    I do not for example think that some poor bartender who lost over half of his summertime income will be able to get much money.

    Half of that money will be stolen and the other half will be used to make people dance like little puppets for it.