BP Spill Claims Process Inadequate, Too Slow, Fishermen Tell Federal Judge

Commercial fishermen and coastal businesses losing income because of BP Plc’s uncontained oil spill in the Gulf of Mexico asked a federal judge to oversee the company’s process for paying interim damage claims.

Lawyers for hundreds of Gulf fishermen, shrimpers and beachfront rental property owners asked U.S. District Judge Carl J. Barbier to appoint a court supervisor to address complaints that BP’s claims-payment process is inconsistent, one-sided and inadequate to address the needs of individuals experiencing dire financial hardship as a result of the spill.

“Telling the fishermen that their only recourse is to bring their problems with BP’s procedures to BP is like telling the hens to bring their issues with henhouse safety to the fox,” lawyers for the fishermen said in papers filed today in New Orleans federal court.

At a hearing in New Orleans this week, BP’s lawyers told Barbier the fishermen must give the claims process a chance to work and said that lawsuits over economic damages suffered from the spill are premature.

“The process is underway and working, and hundreds of thousands of dollars in claims have already been paid,” Don Haycraft with Liskow & Lewis PLC, one of BP’s lawyers, told Barbier. “We need to give the process a little more time to let the dust settle.”

1990 Law

Haycraft said the Oil Pollution Act of 1990 established a process through which injured parties can submit substantiated claims for lost income directly to the company responsible for the spill, which then has 90 days to evaluate and pay the claims. He said if economic losses continue, the fishermen can seek additional payments.

“If they’re dissatisfied, they can come back next week,” Haycraft said. “Each claim is being paid without prejudice. Parties who accept interim checks don’t forfeit the right to seek future claims, he said.

Qualified claimants can set up monthly automatic damage- claim payments directly to their bank accounts, according to information posted on BP’s website. The company promises to either accept or reject claims within 48 hours of receiving proper documentation, according to the website. Claims can be submitted electronically through the website or at claim- assistance centers BP has set up in communities along the Gulf coast.

If a claimant is dissatisfied with the amount BP offers or if BP fails to act on the claim within three months, Haycraft said, only then can the injured party sue BP or seek repayment from the government’s Oil Spill Fund.

‘Free of Judges’

“The claims process is designed to be free of judges and lawyers,” Haycraft said. “There’s no need for a lawyer, it’s so simple.”

More than 50 lawyers representing fishermen, shrimpers, coastal property owners and tourism-related businesses crowded into Barbier’s May 19 hearing, which was called on 24-hours’ notice, to complain of a variety of difficulties with BP’s claims process. They provided greater detail on these complaints in today’s court filing.

“Some fishermen are being told by BP that if they’re represented by counsel they have to go to the back of the line” to have their claims processed, New Orleans attorney Gladstone Jones told Barbier.

Other fisherman are worried that, despite BP’s assurances, if they accept payments now, they’ll be unable to press claims for any larger economic damages that may become apparent later, according to the filing.

‘Dire Circumstances’

“We’re talking about people in dire circumstances,” lawyer Val Patrick Exnicios said at the hearing. “They’re willing to sign almost anything because they need that money to put food on the table and pay the electric bill.”

Fishermen and other business owners also say they are unclear about what types of documentation they must submit to substantiate lost income, and whether BP will keep their personal financial information confidential and not use it against them in later litigation.

“There’s not been a process like this, where the U.S. government is forcing you and your client to go work with claims adjusters who are working for the defendant,” said Stuart Smith, another attorney suing BP.

BP spokesman Scott Dean didn’t immediately respond to a reporter’s request for information on how BP is handling interim damage claims or addressing the fishermen’s complaints.

“We need a referee to call balls and strikes,” Jones told Barbier, who set another hearing on the request for court supervision for next week.

‘Working Very Well’

Haycraft told Barbier that Homeland Security Secretary Janet Napolitano has publicly stated that BP’s claims process “is working very well.”

Exnicios, who represents the United Commercial Fisherman’s Association, replied that Napolitano’s statement in support of BP reminded him of former President George W. Bush’s comment, “Brownie, you’re doing a heck of a job.”

Bush drew criticism for his early praise of then Federal Emergency Management Agency chief Michael Brown’s response to Hurricane Katrina.

BP’s damaged subsea well has been leaking in excess of 5,000 barrels of oil daily since the Deepwater Horizon drilling rig exploded and sank last month, 40 miles off the Louisiana coast. The National Oceanic and Atmospheric Administration, which oversees U.S. territorial waters, has closed almost 20 percent of the Gulf of Mexico to commercial fishing as a result of the spill, which threatens the coastlines of four states.

BP faces more than 130 lawsuits in courthouses from Texas to Florida. The majority of the suits also name Transocean Ltd., which owned the rig; Cameron International Corp., which supplied blowout prevention equipment; and Halliburton Energy Services, which provided cementing services to the well.

To contact the reporter on this story: Laurel Brubaker Calkins in Houston at laurel@calkins.us.com.

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