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Mental Health Claims From Oil Spill Probably Won’t Be Paid

The administrator of BP’s $20 billion fund says he will probably not compensate people for mental health claims. “You have to draw the line somewhere,” the administrator, Kenneth Feinberg, told members of Congress recently.

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Kenneth Feinberg, administrator of the BP Oil Spill Victim Compensation Fund, testifies before the House Judiciary Committee on July 21. (Tim Sloan/AFP/Getty Images)

BP's $20 billion fund to compensate those hurt by the Gulf oil spill will probably turn down one controversial class of claims: those for mental health problems.

In little-noted testimony before the House Judiciary Committee on July 21, Kenneth Feinberg, the independent "claims czar" who will decide who gets compensated, said the fund was not likely to pay damages for mental illness and distress alleged to be caused by the spill.

"If you start compensating purely mental anguish without a physical injury -- anxiety, stress -- we'll be getting millions of claims from people watching television," Feinberg said. "You have to draw the line somewhere. I think it would be highly unlikely that we would compensate mental damage, alleged damage, without a signature physical injury as well."

Feinberg's policy will affect individuals and businesses with claims against BP, but not claims by the government. Claims by state and local governments for the costs of additional services will not be evaluated by Feinberg, and are handled directly by BP.

As we've reported, the Louisiana health department has warned of a looming mental health crisis in communities affected by the oil spill and is pressing BP to pay for its costs. On July 9, health commissioner Alan Levine wrote to U.S. Health and Human Services Secretary Kathleen Sebelius that state counseling teams were encountering "increases in anxiety, depression, stress, grief, excessive and earlier drinking and suicide ideation" following the disaster. BP has not yet responded to Louisiana's request that it pay $10 million to cover the costs of emergency mental health services.

BP spokeswoman Patricia Wright said that the calls for funding for mental health services -- which have also been submitted by Mississippi, Alabama and Florida -- have been requests rather than formal claims. She confirmed that the company has not yet responded to the requests.

While Feinberg's standard is separate from BP's policy on requests or possible claims by states, it shows that he is following the guidelines set by liability law. Tort law generally holds that mental health problems must be accompanied by a physical injury to merit compensation, David Owen, a law professor at the University of South Carolina, has told us.

However, Congress could direct Feinberg to expand the type of damages that his fund will cover. When Rep. Sheila Jackson Lee, D- Texas, pointedly asked him at the July 21 hearing if he would cover damages such as mental health if Congress passed a law requiring it, Feinberg replied that he would.

Brian J. Donovan

July 27, 2010, 3:29 p.m.

The issue is whether victims of the BP oil gusher will also be victims of class action lawsuits and 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?”

However, class action lawsuits may not be in the best interests of some victims of the BP oil spill when the damages suffered by each individual plaintiff are potentially so great. For a better understanding of the issues involved, visit:

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

Lagniappe, that is how th folks down in Louisiana would describe paying for mental anguish.