Payout Official Set For Surge In BP Spill Claims
The deadline for claims against BP Plc (BP.L) in connection with the 2010 Gulf of Mexico oil spill is 11 months away, but the man responsible for paying the claims said on Thursday he is already bracing for a late surge in filings.
Patrick Juneau, a Lafayette, Louisiana attorney experienced in complex litigation, was named by U.S. Judge Carl Barbier last year to oversee BP's settlement with the many individuals and firms who say they were harmed by the spill and its aftermath.
Of 165,877 claims filed as of May 15, his office has found 40,970 eligible for payment, with a total value exceeding $3.2 billion, he said, adding that the pace of filings from the five states covered by the settlement has picked up in recent months.
"It certainly wouldn't surprise me that we'd break the 200,000 mark," Juneau told Reuters. He said his office has been careful about evaluating claims, and expressed frustration at a court challenge by BP to payments for economic losses to businesses harmed by the spill.
The Deepwater Horizon Claims Administration headed by Juneau took over claims processing last spring from Kenneth Feinberg, who had already paid out $6.6 billion under a claims process that pre-dated the settlement in April 2012.
Juneau said that as the deadline for claims of April 22, 2014, approaches, the pace is certain to pick up more. "It's happened in every case I've been involved in, and there's no reason to believe it would be otherwise in this case," he said.
His New Orleans office now employs more than 1,000 people, and still needs more help to handle the load, he said, noting that some claims involve "huge business losses that require a ton of accounting analysis."
Juneau expressed frustration over a complaint BP filed in Barbier's court in January, which alleged frivolous and "fictitious" claims were being paid because the administrator was misapplying a formula for calculating eligibility. He noted that the office has denied about 16 percent of the claims filed.
After Barbier upheld Juneau's administration, BP said it would appeal the matter to the Fifth Circuit Court of Appeals, which agreed to an expedited appeal process.
Juneau noted that BP lawyers raised no objections to terms of the settlement when it was first considered by the court.
Before starting the claims process, Juneau said he and his team reviewed many procedural questions with lawyers for BP and the plaintiffs to ensure they all agreed on how claims would be analyzed. He said formulas in the agreement were designed to take subjective considerations out of the process and ensure claims would be decided based on quantifiable economic factors.
"Nobody anticipated - ever - a controversy like this," he said, though he acknowledged it was "very unusual" that BP signed the agreement despite the fact it did not cap the dollar value of claims.
BP set aside about $8 billion to cover the settlement, but has expressed concern about the escalating "business economic loss" payments, and has even asked the UK government to intervene, according to the BBC.
While claims run the gamut from seafood losses to property damage, business economic losses are the costliest category: More than $1.7 billion have been deemed eligible for payment so far, and Juneau said the pace picked up the last three months.
He believed this was because businesses well north of the Gulf Coast but within the boundaries of states designated by the settlement only recently realized they may have eligible claims.
"The requirements (for filing) get more difficult the farther away you live from the coast, but the entire states" are covered by the settlement, he said.
Juneau, who reports to the district court, says he is in constant contact with Barbier, who is hearing the broader trial covering the spill.
Noting the trial's first phase wrapped up faster than expected, he said Barbier has shown he's determined to keep the case on a fast track. "I'm just trying to match that attitude, and thus far I think we've pretty well done that," Juneau said.
At age 75 and with decades of handling big cases behind him, Juneau said what drew him to accept his role was its size.
"I knew the magnitude of this thing," he said. "There's never been a case this big in the history of the United States ... it's my chance to put my mark on history."