Dec. 13 (Bloomberg) -- Kenneth Feinberg, administrator of the $20 billion BP Plc oil-spill claims fund faulted for slow payments to victims, is offering a quicker process to final compensation.
Individuals would get $5,000 and businesses $25,000 within two weeks if they accept a fast-track payment process, Feinberg told reporters today on a conference call. Only recipients who received emergency payments are eligible, he said. The checks would be the final, lump-sum payments and in return the claimants must waive their rights to sue BP and the companies involved in the Gulf of Mexico spill.
“This is the quick-payment option,” Feinberg said. The adjustment was made to meet the needs of a diverse group of applicants, he said. “One size does not fit all.”
Government officials and residents of the Gulf Coast have criticized Feinberg and the Gulf Coast Claims Facility he runs for not ruling on claims quickly enough. Businesses face “imminent failure,” Representative Jo Bonner, an Alabama Republican, told Feinberg in a Nov. 23 letter. Associate U.S. Attorney General Tom Perrelli said he had “concerns about the pace of the process” in a Nov. 19 letter.
Claimants who forego the $5,000 or $25,000 payments may apply instead for interim payments on a quarterly basis, or for final payments in excess of the fast-track limits. Claimants have three years to seek interim and final payments. The deadline for applying for emergency payments was Nov. 23.
A backlog of emergency claims will be cleared by Dec. 15, as Perrelli requested, Feinberg told reporters. Jessica Smith, a spokeswoman for the Justice Department, said the agency is pleased Feinberg “heeded our call.”
Compensation for the quick-pay option is based on the size of emergency payments so far and wasn’t a number “picked out of the sky,” Feinberg said. The option doesn’t require claimants to supply additional documentation.
A few spill victims are seeking higher levels of compensation than offered by the quick-payment plan. Feinberg said some final claims have been filed for damages in the “double-digit millions.”
The claims facility will release the methodology used to calculate final payments as early as next week, he said.
The Wall Street Journal and the New York Times reported on the new payment system earlier today.
As of Dec. 11, the claims fund had received 463,795 claims and had written checks for almost $2.48 billion to more than 166,000 people and businesses, according to the Gulf Coast Claims Facility’s website. More than 232,400 claimants had been denied.
About 2,000 to 3,000 claims are “very suspicious,” and may be fraudulent, Feinberg said.
The fund will provide claimants free access to attorneys before signing away their legal rights. The facility will also hire local workers on site to help handle claims, Feinberg said.
To contact the reporter on this story: Jim Snyder in Washington at email@example.com.
To contact the editor responsible for this story: Larry Liebert at firstname.lastname@example.org.