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Frustrated Oil Spill Claimants Consider Alternative Compensation Fund

Sept. 24: This post has been corrected.

One month after independent paymaster Kenneth Feinberg took control of managing Gulf spill damage claims, many claimants at his Gulf Coast Claims Facility are still awaiting a response to their applications. As these delays cause increasing frustration and financial hardship, interest is growing in a little-known alternative fund that handles oil spill claims -- the Coast Guard's National Pollution Funds Center.

Claimants who have applied to the Coast Guard's fund have reported swift intake of their claims and direct contact with their adjusters. But the fund is available only to applicants whose claims have been rejected or who have waited at least 90 days after applying without a decision, and has narrower eligibility guidelines and less money available than Feinberg's operation.

Gulf Compensation Chief Retreats From Promises to Speed Claims Process

Just over two weeks ago, Kenneth Feinberg took over the process for handling damage claims from the Gulf oil spill, pledging to cut down the response time from BP's widely criticized system to two days for individuals and seven days for businesses that file fully documented claims.

After a rocky start in which claimants have reported chronic delays and confusion, Feinberg is now retreating from his targets and acknowledging that the process will take longer than he had pledged.

Have You Worked Processing Gulf Spill Damage Claims?

So far, nearly 200 people with oil spill damage claims have told their stories to our BP Claims Project, providing us with valuable insights and tips on how the compensation process is working.

But to fully understand the claims system, we want to get a view from the inside. We want to hear from the people who are handling the claims – the reviewers, adjusters and other claims management workers who have been employed by BP and the Gulf Coast Claims Facility.

New Gulf Compensation Chief Lags in Processing Claims

Just over a week ago, when Kenneth Feinberg took over the process for handling damage claims from the Gulf oil spill, he promised to cut through the delays and confusion that applicants faced under the much-maligned BP system.

But signs are emerging that Feinberg’s goals – particularly his pledge to respond to personal claims for emergency payments within 48 hours – may be overly ambitious. Applicants participating in our BP Claims Project say that they have not received responses within two days of filing claims and that they have encountered an array of service problems, from a system crash to difficulty in transferring critical paperwork.

BP’s Claims Reporting Leaves a Fuzzy Picture

BP is providing only a limited picture of its progress in paying damage claims from the Gulf oil spill, making it impossible to tell how fully it is compensating the losses that have been claimed to date.

The company places all claims for which it has issued a check into a single category: "Claims With at Least One Payment." As of Aug. 17, the 44,400 claims in this category represent less than a third of total claims, and the company has disbursed $368 million in payments, according to BP's website. Yet in spite of complaints about the transparency of the company's data, BP does not disclose how the money spent on these claims compares with the amount requested by applicants, or whether the company has continued to make monthly payments after sending out an initial check.

Photo by flickr user sparkieblues http://www.flickr.com/photos/sparkieblues/3971258497/

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