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BP Abuses Oil Spill Claims Appeal Process

4 comments

I have written before about BP saying one thing while doing the opposite. Unfortunately for the people of the Gulf, such is the company’s modus operandi.

Case in Point

When trying desperately in 2012 to win judicial approval for the company’s Settlement Agreement with Gulf Coast businesses and individuals affected by the disaster, BP lead attorney Richard Godfrey said the following to a packed New Orleans courtroom:

“The settlement is placing large sums of money today and tomorrow and next week into the hands and the communities of the Gulf, the victims of this tragic event. We believe that it’s fair, just and reasonable, and that this process should not be interrupted or stopped based upon the objections of the few for the purpose of injuring the many who need to be compensated now.”

That noble sentiment followed a prior statement by BP’s CEO Bob Dudley when announcing the Settlement:

“BP made a commitment to help economic and environmental restoration efforts in the Gulf Coast, and this settlement provides the framework for us to continue delivering on that promise, offering those affected full and fair compensation, without waiting for the outcome of a lengthy trial process.”

Lofty promises about prompt and fair payment of compensation. Yet three years later, only a small minority of claims have been paid. And the lion’s share of the blame for such slow pay can be laid squarely at BP’s feet. The company has broken its promise, and it has done so by design.

1,011 Days Later

Mr. Godfrey told us that the Settlement is “placing large sums of money today and tomorrow and next week into the hands of the communities of the Gulf.” It has been 1,011 “todays and tomorrows” since the Settlement Agreement was executed. And there have been 145 “next weeks.”

In that time BP has sued the Claims Administrator, filed one legal challenge after the other with the 5th Circuit Court of Appeals, asked the Supreme Court to intervene, refused to pay the vendors hired to process the claimslevied all sorts of unfounded allegations of conflicts of interest, and appealed thousands of legitimate awards made to small business people devastated by the spill. As a result, only a small fraction of claims have actually been paid, 2 years, 9 months and 5 days later.

BP has lost nearly every one of these legal battles, with the Supreme Court eventually telling the company to go pound sand. But a substantive victory is not what BP seeks. Despite Mr. Godfrey telling us that the payment “process should not be interrupted or stopped based upon the objections of the few for the purpose of injuring the many who need to be compensated now,” that is exactly what BP is doing. And it is intentional.

June 8, 2015

The last day to file a claim for losses associated with BP’s disaster is June 8, 2015. BP is clearly pulling out all the stops to keep money out of deserving hands until that date passes. By making it difficult, through any means necessary (frivolous appeals, outlandish charges, etc), for a claimant to successfully resolve a claim, BP keeps the money off the streets, in hopes of discouraging new claimants from participating in the program. The goal is to suppress filings by convincing legitimate victims that they simply should not bother.

Bad Faith Appeals

They do this by filing baseless appeals that border on bad faith. BP has filed 5,600 appeals, losing 90% of them. But winning is not BP’s aim, delaying payment is. The appeal process takes between three and six months to complete. The exact time frame that includes June 8th.

The frivolous nature of these appeals is not lost on the appeal panelists, well respected emeritus attorneys who reviewed the claims de novo:

“The grounds assigned by BP on this appeal are the weakest and least supported yet. … The lack of any credible argument on this appeal makes this panelist question whether it was taken in good faith.” Appeal 2014-974

“BP’s proposal … is totally unsupported…” Appeal 2014-986

“BP suggests that switching to this alternative period would actually have decreased claimant’s recovery. This is completely inaccurate and BP seems to be pulling numbers out of thin air.” Appeal 2014-472

“BP offers nothing whatsoever in support of its contention … and it should be noted that the first basis for appeal cited by BP is vague and completely lacking in detail … this panelists finds no support for BP’s contention.” Appeal 2014-433

“I find no merit in BP’s argument.” Appeal 2014-446

“BP’s utter failure to disclose this information is troubling when disclosure is undoubtedly required.” Appeal 2014-385

“BP’s evidence is scant.” Appeal 2014-439

“In this Panelist’s view, [BP’s] arguments have nothing whatsoever to do with the substance of [the alleged error] and should be ignored as a violation of Appeal Panel Procedural Rule 8.” Appeal 2014-486

“There is no textual reading of Exhibit 4C of the Settlement Agreement that supports BP’s argument.” Appeal 2014-437

“Finding no basis in the Settlement Agreement supporting BP’s position.” Appeal 2014-415

“In neither instance does BP cite to anything in the record in support of its suppositions.” Appeal 2014-448

“This appears to be a case in which BP has drawn incorrect conclusions from selected parts of the record and presented them on appeal as fact. A review of the record demonstrates that BP’s argument is incorrect.” Appeal 2014-447

“BP does not offer any evidence that Policy 495 was misapplied.” Appeal 2014-469

“BP’s appeal on the issue is without merit.” Appeal 2014-473

“BP’s position is without merit.” Appeal 2014-494

“There is simply no basis for BP’s relentless advancement of arguments that have been soundly and consistently rejected.” Appeal 2015-178

4 Comments

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  1. dk says:
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    As an attorney who represents claimants, opposing BP’s appeals on a daily basis, I can attest that the vast majority of BP’s appeals are utterly baseless. To Al Ghindal, believe me, the PSC attorneys’ individual clients fare no better than the rest.

  2. Al Ghindal says:
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    What about the additional burden post 495 BEL claimants have to face just to get to the appeal stage. For most, their claims won’t make it past the incompleteness notices and nonsense document request. A big thank you to the PSC for expediting their own claims and leaving the rest of us hanging.

  3. Eyeswideopen says:
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    Under OPA GCCF was required to issue a notice within 90 days.

    Part of the failure lays with the PSC for removing these deadlines and not installing a strong penalty for this abuse and stall tactic.

  4. up arrow

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