An unjustified swipe against the BP fund administrator
24 Jul 2010
It might not be surprising that some Plaintiffs’ counsel have taken to knocking a highly respected attorney in an effort to discourage people from seeking direct compensation from BP’s $20 billion compensation fund, but it is disappointing.
BP has appointed former 9/11 fund administrator Kenneth Feinberg to administer its compensation pool.
Ervin Gonzalez chairs a committee of plaintiffs’ lawyers representing claimants seeking compensation from BP for damages arising from the oil spill caused by the explosion and sinking of its Deepwater Horizon well in the Gulf of Mexico.
Firstly, Kenneth Feinberg is a highly respected mediator and attorney who is noted for the work he did helping families find closure after the worst act of terrorism in American history. He managed to treat everyone with fairness and compassion in that case, and his appointment in this case was recommended by the U.S. Government. Mr. Gonzalez has no cause to suggest that he is a mere tool in BP’s hands.
Secondly, BP’s direct compensation fund is an enormous sum that dwarfs the GDP of some small countries. Notwithstanding this, no one has suggested that it represents a cap on the damages to be paid. Mr Gonzalez’s statement that it is merely an attempt to get away from paying the full amount of the damages it caused is baseless.
The fund has apparently been set up in good faith, and plaintiffs’ counsel should display the same good faith in at least trying to negotiate compensation from that fund – maybe even based on a reasonable hourly rate, rather than their traditional one-third contingency fee.
The fund represents a streamlined settlement mechanism, and even if the amounts paid turn out to be somewhat less than a court might award (a proposition that has not been established), the money would be paid out based on less evidence than a court might require, at less expense and sooner than would be the case through litigation. That could well mean a net benefit to the claimant.
Plaintiffs’ counsel have an ethical responsibility to prospective claimants to explain their options. That responsibility would be better discharged without a knee-jerk reaction against a mechanism not designed for the optimization of their fees.
