Is 9 Months Enough Time to be Optimistic About the Gulf?

The “BP Fund Czar”, Kenneth Feinberg, says his staff has been interviewing officials at “government regulatory agencies” to determine how severe the impact of the largest oil spill in the history of the United States will actually be from a long term perspective.

There are at least a couple of noteworthy issues.

First, the largest oil spill in the history of the US has no historical comparisons from which we can make predictions; no models we can use to look into the future and predict what the damage to the environment will be. In large measure, the injury to the environment in the future drives the damages suffered by residents and business owners in the Gulf States, including Florida, Alabama, Mississippi, Louisiana and Texas. If we lack any reliable models, then how can any accurate comparisons or analogies be drawn to allow reliable predictions to be made.

Second, Mr. Feinberg is speaking to people in “government regulatory agencies”? These would presumably be the same agencies that allowed this disaster to happen? Why would the “BP Fund Czar” draw on information and opinions from bureaucrats when he has some of the most brilliant minds in the world available to him? Why would he not organize leading environmental, geologic and business experts to aid him in his conclusions?

Mr. Feinberg says that “he is finding mostly an optimistic view of the Gulf’s future”. Based on…?

The bureaucrats in the “government regulatory agencies” have a need to paint an optimistic future for damages flowing from the oil spill. From a “human nature” perspective they would want their actions and inactions to have the most minimal negative results possible. In addition, the administration would understandably like to solve everyone’s problems and the financial losses as quickly as they can.

Is it wise, a mere 9 months after an oil spill that saw over 205 million gallons of crude oil to free flow into a basin we call the Gulf of Mexico, to declare blue skies and calm seas?

As late as December, BP claimed that:

“They (the government agencies) rely on incomplete or inaccurate information, rest in large part on assumptions that have not been validated, and are subject to far greater uncertainties than have been acknowledged. BP fully intends to present its own estimate as soon as the information is available to get the science right.”

I am not suggesting that BP is a source of unadulterated or reliable information, but so far, reports are that the “government regulatory agencies” have offered as many as 10 different estimates of the extent of the oil spill.

So what can victims do who have suffered as a result of this oil spill? As difficult as it is: exercise caution in transacting claims with the BP Oil Spill Czar. I am not suggesting that everyone who has suffered damages needs to have a lawyer; for many that may be completely unnecessary.

Be aware, though, of what both the “Czar” and, in some respects the government, is trying to achieve:

They want victims to execute full, final and all encompassing releases of their claims. It may be that those who do execute such releases will be forever prevented from pursuing claims against ANY entity for future losses they did not or could not anticipate.

The oil spill happened on the watch of these “government regulatory agencies” and the worse the oil spill damage to environment and economy, the worse their performance as regulators appears.

It is in the best interest of BP and the government that this disaster be put behind everyone as expediently as possible. No one looks good and as time goes by it is reasonable to anticipate that more and more will be learned about why and how this happened.

In order to provide immediate response to victims’ claims and yet balance that against fairness to BP and the other companies who contributed to the oil spill, the government is understandably trying to perform a precarious balancing act over the interests to be protected.

If you intend to process your claims through the BP Oil Spill fund:

• Carefully compile all your losses.
• Carefully document your past losses.
• Look into the future and try to anticipate the losses you may suffer in the future.
• Consult experts (accountants, appraisers, people in your industry) to try and get a reasonable grasp on just what you, more likely than not, can expect into the future.
• Submit your claim.
• If you receive a response to your claim from the BP oil Fund, carefully evaluate what they are offering you.
• Seek the advice and consultation of anyone you feel you need and trust.

If you do not feel the Fund personnel are treating your claim fairly, consult an attorney. Find a good attorney who will give you good advice about what losses you can legally collect; the costs involved in litigating your claims; and the best judgment for the likelihood of success with your claim.

Good attorneys will not try and convince you to litigate claims that do not make sense to litigate, given your financial position or the ability to prove your damages. Good attorneys will not try and convince you to hire them and to file a lawsuit if that is really not in your best interests.

Again, simply exercise caution and understand that the BP Oil Fund employees are not working for you.