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BP Leaves Many Damage Claims Waiting in Limbo

BP is lagging on deciding the validity of many damage claims, and claimants may have to wait until after the special administrator takes over later this month.

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A BP claims center in Houma, La. Many claims not explicitly covered by the 1990 Oil Pollution Act remain unresolved. (Spencer Platt/Getty Images)

BP appears to be delaying decisions about the validity of many claims for damages from the Gulf oil spill, leaving claimants frustrated by bureaucratic obstacles and confusing requests for more documentation.

The company's claims process is guided by the Oil Pollution Act, a 1990 federal law that holds oil companies responsible for repaying direct "removal costs and damages" caused by a spill. But many claims are for damages that are not explicitly covered by the law -- such as ruined start-up companies and lost income from commission payments -- and many of those are in limbo.

BP appears to be delaying claims that are not covered by the Oil Pollution Act until the process is taken over in mid-August by Kenneth Feinberg, the independent administrator appointed by President Barack Obama to oversee the compensation process. Feinberg has said that his standards for judging claims will be more generous than the limits set by the Oil Pollution Act.

Daren Beaudo, a spokesman for BP, said, "It may be simpler for Mr. Feinberg to take on those non-Oil Pollution Act related claims."

While BP is reviewing claims whose eligibility under the Oil Pollution Act is uncertain, it has not indicated which types of damages have been approved for payments and which of these claims are being delayed as well.

The issue came to our attention following responses to ProPublica's BP claims tracking project by readers, who said that their claims for certain types of damages were in a holding pattern.

The frustration caused by the delays is compounded because BP is not explaining the situation to claimants. Instead, claimants describe a pattern of unreturned phone calls, frequent switches of the adjuster handling their claim, and requests for more documentation. Three ProPublica readers said they received form letters from BP saying that they had not provided enough documentation, only to be told later by adjusters that in fact the company was not yet approving the type of claims they had submitted.

It is unclear how many claims are being delayed because of doubts regarding their eligibility under the Oil Pollution Act, or how many claimants in this situation have been told they provided insufficient documentation. According to the latest data from BP, the company has held up a total of 59,900 claims for having insufficient documentation, accounting for 43 percent of all claims and significantly outnumbering the 38,400 claims that have been approved. (If you have had a similar experience, you can tell ProPublica about it here.)

These newsrooms have partnered to help ProPublica find BP claimants: American Public Media's Public Insight Network, Huffington Post Green, NOLA.com, The Bradenton Herald, The Gambit Weekly, The Lens, The Miami Herald, St. Petersburg Times, Tallahassee Democrat and Yahoo! News.

BP spokesman Ray Viator wrote in an e-mail that "our policy is to send letters citing 'insufficient documentation' only to those claimants where that applies," and said that the sample letter provided to him from a ProPublica reader's claim had been sent in error by BP. Viator also said that the company had instructed adjusters to inform claimants if their claims were being reviewed for eligibility under the Oil Pollution Act.

One area in which BP appears to be delaying decisions because of uncertainty about the Oil Pollution Act is claims for lost income from commission payments.

Duane Sandy, a salesman of hurricane-proof storage units based in Fort Walton Beach, Fla., said he is paid on commission and has not sold a single unit in Florida since the spill. He said he submitted a claim in May for $3,500, based on the income he expected to lose relative to his commission payments in 2009, with a letter from his boss as documentation. He has not received any checks, and he received a form letter from BP dated July 19 stating that he had "provided insufficient documentation to support the claim."

But Sandy said that when he called BP's adjuster, he heard a different story -- that BP would not pay his claim because it was not approving payments for income loss based on commissions. "Once they heard I got paid by commission, they didn't care what I did," Sandy said.

Viator, the BP spokesman, wrote in an e-mail that the company is "currently evaluating claims based on lost income from commissions to determine whether they are compensable under the Oil Pollution Act."

Amy Weiss, a spokeswoman for Feinberg, said people who are paid by commission will be eligible once Feinberg takes over. Sandy may have to wait until the claims system switches control to have a chance to get compensated.

Claimants have also reported extended delays in decisions on such damage claims as lost income from a commercial photographer in a beachfront tourist town, lost down payments on canceled Gulf Coast vacations and lost sponsors for a television show about fishing in the Gulf.

If you've filed a claim with BP and been told that you didn't provide enough documentation -- or if there's any other part of your experience that we should know about -- you can tell ProPublica what happened with this simple form. If you have questions about the BP claims process, check out ProPublica's Unofficial Guide to BP Claims.

Amanda Michel contributed reporting to this piece, and is coordinating our BP claims project.

Update: Several hours after this report was published, BP sent out a press release acknowledging that decisions on “several thousand claims” will be deferred until independent administrator Kenneth Feinberg takes over the compensation system. Here is our story about BP’s statement.

We are currently going through the claims process right now. It appears that getting the first claim, at least for us, was quite simple. Go in with pay stubs, letter from employer, tax return, etc and walk out with an advanced payment. For a July payment, however, it has been nothing but a run-a-round. The information provided in the last press release from BP isn’t being followed. I have made several phone calls to the 800 number to find out exactly what we need to do, to be told different answers from different people with each phone call and our auditor doesn’t seem to know what is being released by BP to the press nor understand what we are being told by other BP employees during our inquiries. Meanwhile, my husband, who works in tourism and hospiality in a seafood-based business, has lost almost 45% of his income because they either do not have the seafood, the prices have been raised because they have to ship seafood in, people cannot afford to go out because they are impacted as well or they are afraid because of the oil spill and fear their goods will be contaminated. Promises does not pay our rent or utilities and empty promises does not do much to insure faith that we aren’t being forgotten about here in the Gulf, especially as mainstream media paints a picture that everything here is now fine and dandy.

Brian J. Donovan

Aug. 3, 2010, 8:56 a.m.

The Oil Pollution Act of 1990 (OPA) broadened the scope of damages (i.e., costs) for which an oil spiller would be liable. Under OPA, a responsible party is liable for all cleanup costs incurred, not only by a government entity, but also by a private party. In addition to cleanup costs, OPA significantly increased the range of liable damages to include the following:

• injury to natural resources,
• loss of personal property (and resultant economic losses),
• loss of subsistence use of natural resources,
• lost revenues resulting from destruction of property or natural resource injury,
• lost profits resulting from property loss or natural resource injury, and
• costs of providing extra public services during or after spill response.

The issue is whether victims of the BP oil gusher will also be victims of the BP Oil Spill Victim Compensation Fund.

Orange Beach, Alabama Mayor Tony Kennon recently said the pace of BP aid has been far too slow and that many Gulf businesses might not make it past the end of the summer. Referring to BP, Kennon stated, “They’ve paid essentially nothing,” he said. “As far as I’m concerned, they’re dishonest. They’re running this big PR campaign.”

“I am determined to come up with a system more generous and more beneficial than if you file a lawsuit,” Feinberg repeatedly states. Here, the question is whether the system will be more generous and more beneficial for BP or BP’s victims.

Attorney General King is correct in stating that it is time for the State of Alabama to file a lawsuit against BP. Memories fade with the passage of time. Therefore, witnesses should be deposed as soon as possible. Postponing litigation will only benefit BP.

BP’s defense will be simple: “Spill, what spill? Dispersants, what dispersants? Compensation fund, what compensation fund?”

All victims of the BP oil gusher should read this article:

http://donovanlawgroup.wordpress.com/2010/07/19/165/

and

http://donovanlawgroup.wordpress.com/2010/07/29/is-the-bp-oil-spill-victim-compensation-fund-legitimate/

Montana Miles

Aug. 3, 2010, 10:37 a.m.

Mr Fienberg is the czar for Obama on handling the $20 billion fund set aside by BP for people adversely effected by gulf spill.

Yet Fienberg has to ask BP for the funds? So when Obama had BP set aside the funds; was that a good cop bad cop routine?

BP the bad cop and Obama the ______   _____? Is that why Fienberg has to ask BP to allocate funds?

Marcie Hascall Clark

Aug. 3, 2010, 2:32 p.m.

Remember that the Insurance Company ACE/ESIS who handles Defense Base Act Claims for Injured Contractors is handling the Compensation Claims for BP.
It’s another Dream Team for denying claims.

http://defensebaseactcomp.wordpress.com/2010/06/24/ace-in-place-to-deny-bp-oil-spill-compensation-claims/
http://defensebaseactcomp.wordpress.com/2010/07/11/ace-and-bp-another-dream-team/

when corporation don’t want to help people

                  The magic word is

        NOT ENOUGH DOCUMENTATION

We see this with Banks, Insurance Companies, and Big corporations like BP. Our Government no different.
        We all remember Hurricane Katrina.

I wonder how long will it be before people start to realize
that the only people who has enough documentation in this country to get some help from the Government and from Corporations are the UNDOCUMENTED.

I’d like to know if Montana Miles really knows what he or she is posting? Can President Obama just wave his hand and presto the money from BP comes forth, or are there trivial things like, needing to prove that bp must pay John Smith $3 million dollars for his seafood business?

Before you make a post that makes you look foolish, find out what the facts are.

Goodness, why are we even surprised & bickering about this? The facts speak for themselves. This has all been “Kabuki” on all parts of participation. The Government, “O”,  B.P., not to forget the G.O.P. currying favor with their hands out to the O & G industry for donations to their already corrupt greedy P.A.C.‘s, oh yes, the Demo’s too. Face it folks, if you happen to be a taxpayer, then surprise, surprise, you get to foot the bill. Perhaps it’s time that “All Good People, Come To The Aid Of Their Country” and throw the “BUMS’ out. Now, that just might get some attention, along with a few bucks to buy you off. How about a $50.00 Wall-mart shopping spree, on B.P.?

BP really don’t seem to have taken on board that they need to change their corporate response to the public and be much more open and honest about their dealings. They really need to change their crisis management approach - all they are doing at the moment is making a bad situation worse - getting rid of Tim Hayward has apparently not altered the corporate mind-set, which appears to be ‘we are BP, you are nobody - we do not need to answer to you’. Any old crisis management text book will tell them where they are going wrong!!

Isn’t bureaucracy wonderful?  Please let me get this right, Kenneth Feinberg has a job and he is going to take away jobs and income from over 700 claims adjusters and their families so, he can save the day for Obama! People these claims adjusters are not acting on their on accord, they must abide by BP’s rules for compensation, the government is well aware of this… If Feinberg can change BP’s mindset and instructions for releasing funds to his two new companies then why Not do it with the current adjusters who are already familiar with the cases?  Most adjusters are just as frustrated as the claimants…They want to help the legitimate claims and are very grateful they have jobs!

What am I missing here? Where do you get what you write? Perhaps I am miss reading this post, but yours seems to say something that isn’t there. Enlighten us, if you don’t mind?

This article is produced with the help of readers:
ProPublica Reporting Network

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Here's the deal. We'll give you code so you can easily collect stories on your web site. We'll have access to the stories you collect. In return, we'll share stories from your area that come in through our site and outreach. E-mail Amanda if you're interested or have questions.

These newsrooms have partnered to help ProPublica find BP claimants: American Public Media's Public Insight Network, Huffington Post Green, NOLA.com, The Bradenton Herald, The Gambit Weekly, The Lens, The Miami Herald, St. Petersburg Times, Tallahassee Democrat and Yahoo! News.

ProPublica's Unofficial Guide to BP Claims

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