BP Oil Fund Payments to Begin in August

Due to the oil spill in the Gulf of Mexico, BP has earmarked $20 billion to cover losses felt by individuals and businesses in the area. Ken Feinberg, a BP representative in charge of facilitating payments has indicated that the reimbursement process will start in early August. Feinberg met with Louisiana state officials this week to express his optimism about taking over for the current BP management team.

Feinberg hopes to improve upon the current payment system, making it “more beneficial to the people using it.” BP has been accepting claims at 35 different offices across the Gulf Coast but will be handing the reins over to Feinberg who will oversee all claims filed against the $20 billion oil fund. The BP administration will no longer be involved in the claims process, except in the funding capacity. They will provide more money if the valid claims exceed the $20 billion already raised.

Feinberg explains that the offices will remain open for the next three years, during which claims can be filed at any time. When a claim is accepted, it will be paid within 90 days. Feinberg’s team is prepared to make the first round of payments in August. It is still uncertain how transparent the oil fund will be. Data will certainly be available to the public, but the identity of claimants pay be protected for privacy reasons.

This is not Feinberg’s first experience with large-scale claims. In fact, he oversaw the compensation of families of the terrorist attack victims on Sept. 11th. He therefore worries that making names available to the public or to local government agencies may create barriers that deter potential recipients.

Anyone with a documentable claim can and should apply. BP has agreed to compensate for up to six months of lost wages, as well as other large lump-sum settlements. Businesses like commercial fishing that are likely to feel the effects of this oil spill for years to come are eligible for some of these larger claims, all of which will be mediated by Feinberg.
This payment program is aimed at preventing future lawsuits. Any company that accepts one of the lump-sum payments is required to sign a settlement agreement not to sue BP, while the six-month wage claim can be collected without forfeiting the right to a formal lawsuit. Feinberg encourages eligible claimants in Louisiana to take advantage of the program as soon as possible.