BP settlements slow to a trickle; Critics say system ‘shockingly inefficient’

Kyle Barnett Oct. 14, 2014, 10:52am

NEW ORLEANS – The numbers are in and the number of claimants paid under the Deepwater Horizon oil spill settlement totals 883 for the entire month of September – leaving more than 131,000 people still awaiting resolution, according to records submitted by the settlement administrator.

Since Patrick Juneau took his position as claims administrator, the production of his 3,000 employee office has slowed considerably. Under the current settlement rate, Juneau’s office, which BP PLC says costs about $41 million to operate per month, is posting administrative costs of nearly $47,000 per claimant.

Juneau’s office did not respond to a request for comment on the figures he submitted to the court.

At the current processing rate, it will take Juneau 12 more years to eliminate the backlog of claims.

The slow pace of paying claims has embittered some plaintiff’s lawyers, who now long for the days when Juneau’s predecessor, Kenneth Feinberg, would settle tens of thousands of claims per month.

Daniel Becnel, a LaPlace trial lawyer whose firm represents hundreds of clients with claims, said the process for payment is moving at a snail’s pace.

“Nobody is getting paid right now,’’ he said. “Nobody is getting paid at all.’’

Becnel said he and other plaintiffs’ attorneys are becoming increasingly aggravated with the Plaintiffs’ Steering Committee (PSC), a group of 18 attorneys who engineered the class action settlement with BP.

Under the settlement agreement, the PSC lawyers separately stand to split $660 million in off-the-top fees. Documents leaked from the claims office show that many of those PSC lawyers, and law firms affiliated with them, had hundreds of their individual claims paid ahead of non-PSC lawyers, under an expediting arrangement that Juneau approved in 2012.

September is not the only month in which Juneau’s settlement statistics have lagged. According to documents filed with the court, Juneau’s office has paid slightly less than 11,000 claimants over a nine-month period from Dec. 11, 2013 until Sept. 1, 2014. At that pace, Juneau’s office is charging BP roughly $33,000 in administrative fees to settle with each claimant.

Becnel said Juneau, who receives $300,000 a month in salary, has no incentive to speed up the process.

“Look, if I were getting $3 million [per year maybe] I would stay there for the rest of my life – if I was interested in the money,” Becnel said. “If I am interested in efficiency, I would do what Feinberg did.’’

Melissa Landry, executive director for the citizen watchdog group Louisiana Lawsuit Abuse Watch, said the current claims process is a fiasco.

“The current rate for processing claims is simply unconscionable,’’ Landry said. “If the program continues moving at this abysmal pace, it could take more than a decade to resolve the remaining claims. For Louisiana residents who were truly impacted by this disaster more than four years ago, and have yet to receive proper payouts, every day is a day too long.”

In a recent filing, BP asked that Juneau be removed from his position as claims administrator, arguing that the system he oversees is woefully inefficient and riddled with fraud.

Geoff Morell, a spokesman for BP, called the claims process “shockingly inefficient” under Juneau.

“Over the past two years, the claims facility’s operational costs have totaled $1 billion – roughly twice the budget of the city of New Orleans in 2014  – while more than one hundred thousand claims still remain to be examined,” he said.


More News