Gulf spill claims: Take money now, or chances later?

It was barely 8 a.m. Monday, and already 74-year-old shrimp fisherman Lorde Duncan was thumbing through paperwork that portends one of the most important decisions of his life: File a new claim for a share of the $20 billion fund set up to quickly compensate victims of the Gulf of Mexico oil spill? Or hire a lawyer and wait years, hoping for more?

Duncan said he had so far received only minimum emergency compensation checks from BP — he hasn’t been able to come up with the documentation required to prove he had substantial fishing income before the spill.

“If I had a million-dollar business, I’d have all that paperwork. But I don’t have no big-time operation, writing checks,” he said as he sat and sweated on an ice chest outside the claims office in Venice, a fishing port barely 50 miles from the oil spill site.

“Daddy, you probably going to need an attorney just to figure this stuff out for you. This don’t make no sense,” said his son, Virgil, 49, who came down to help file the new application.

The compensation program started by government-appointed claims czar Kenneth R. Feinberg on Monday requires everyone who has suffered damages because of the oil spill to file new claims, even if they’ve been wrangling with BP over lost wages and ruined businesses.

Feinberg, who oversaw damage payments from the Sept. 11 attacks on the World Trade Center, has pledged to run a compensation program that is speedy, efficient and fair. He promised to offer lump-sum payments that are equal to or better than what claimants would likely receive if they decided to seek damages through litigation.

“I’m going to have to draw some tough lines, but I’m hoping I’ll be able to enjoy the benefit of saying that if I haven’t found you eligible and you opt out of this voluntary program, no court is going to find you eligible,” Feinberg told reporters.

But government officials along the Gulf Coast, lawyers and potential litigants complain that the Feinberg’s protocol offers substantially less protection than would be afforded in court under the 1990 Oil Pollution Act, which requires the payment of “interim” damages with no forfeiture of the right to sue.

In addition, Feinberg’s policies do not offer protection for future damages that could take years to emerge, critics said.

Those who are seeking smaller, emergency payments have not given up their right to sue.

The new process “appears to have as its primary goal the reduction or elimination of claims against BP, instead of making claimants whole,” Florida Atty. Gen. Bill McCollum said in a letter to Feinberg.

“You have somebody who’s given the cloak of independence, but he’s really a glorified claims adjustor for BP,” said Stephen Herman, who has been representing fishermen, hoteliers, restaurant owners and other businesses

“But there’s a tremendous risk that he’s going to settle this thing as cheaply and as early as possible, and five years down the road, when you’ve still got environmental damages and all the settlement money is used up, you could have a bunch of people who’ve been taken advantage of and have nowhere to turn,” Herman said.

Fishermen are worried that the fisheries damage won’t be known for years. The 1989 Exxon Valdez oil spill in Alaska preceded a disastrous crash in the herring population, but it didn’t happen until four years later.

On the other hand, plaintiffs in the Exxon Valdez case struggled in court for 21 years before receiving a substantially reduced, $500-million punitive damages payment that was so late that many plaintiffs were dead before it arrived.

Many fishermen are also preparing to fight the new Feinberg team over payments they received for hiring out their boats for oil spill cleanup work. Many say their engines were overstressed hauling the heavy, oil-soaked booms and circulating oily water through their cooling systems. Yet Feinberg said that his team would deduct payments earned for oil spill work from claims.

Fishermen who didn’t take cleanup jobs, however, may be entitled to the same payment without deductions, prompting complaints from cleanup workers that they labored hard and ruined their boats for nothing. Many cleanup workers have said they will hire lawyers to seek extra compensation.

“I could’ve stayed home and collected $10,000 a month [in BP claims],” said Wilbert Kraemer Jr., a shrimp fisherman from Chauvin, La.

Feinberg has said proximity to the gulf will be an important measure when calculating compensation, leaving questions among businesses far from the water but dependent on its resources.

Herman is representing hotels and restaurants in New Orleans, a one-hour drive from the coast, which fear significant losses as a result of anxiety among tourists and conventioneers about coming to eat gulf seafood.

“The gulf seafood is one of the main reasons people like to come to New Orleans,” he said.

Feinberg conceded that the “most problematic area clearly is going to be tourism … hotels.”

In the end, Feinberg is telling victims, it can’t hurt to file a claim.

“Simple solution: File a claim, find out how much I’ll give you, and then decide.… It’s almost like you get a free preview,” he said. “If the claimant ultimately feels that he or she can do better by filing a lawsuit and litigating for years in federal court, that is the claimant’s option. And we will see.”