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Oil spill compensation claims could soar over lawyer's links to BP
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 Feinberg, the lawyer who previously oversaw claims to victims of the 9/11 terrorist attacks. However, 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. Feinberg's firm is paid $850,000 [£526,000] a month for its work.
"A full disclosure of the relationship between Feinberg, the claims fund and BP will at least make transparent that it is BP's interests... that are being promoted," the judge ruled.