Gulf Coast Claims Facility

Gulf Coast Claims Facility

On Tuesday, May 11, 2010, Congress called BP, in addition to the company’s two drilling partners, Transocean Ltd. and Halliburton Energy Services Inc., to testify about issues related to both offshore oil and gas developments and the BP oil spill disaster.  BP was the owner and operator of the oil well; Transocean, the largest offshore drilling contractor in the world, was the oil rig’s owner; and Halliburton served as a subcontractor.

In its initial congressional inquiry into the oil spill, members of congress asked senior executives of the three organizations to account for the “cascade of failures” that ultimately led to the catastrophic oil well rupture and subsequent spill. Responsible for the cleanup costs under the Oil Pollution Act, BP Chairman Lamar McKay promised BP would honor all “legitimate claims” and stated that the company was doing everything it could to manage the aftermath of the spill. The U.S. government subsequently named BP as the entity responsible for the oil disaster, making the company accountable for cleanup costs.

The GCCF was established in June as part of an agreement between the Obama Administration and BP as the official means through which people and businesses may file claims for costs incurred as a result of the oil-related damages following the spill. The GCCF and all decisions involving claims administration and processing are administered by government-appointed attorney Kenneth R. Feinberg, a partner at the Washington D.C. law firm Feinberg Rozen LLP and also the former Special Master of the U.S. Government's September 11th Victim Compensation Fund.

GCCF Claims Processing 

The GCCF deadline for emergency claims passed on November 23, 2010, but victims may still file a claim for interim payment for past damages or file a claim for final payment for all past and future damages. The final claims payment stage will last until August 23, 2013. Unfortunately, many individuals are still waiting to receive the funds for which they filed months ago. As of December 2010, the GCCF has had more than 460,000 claims filed and about three quarters of these claims have not yet been approved for payment. 

Problems with the Claims Fund have included such issues as:

• Claims Fund handling understaffed
• Claims not evaluated appropriately (attached details, calculations, etc. not adequately evaluated)
• Claims not processed timely
• No easy way to communicate, ask questions or share data
• No explanation of any deficiencies in payments that are sent
• No explanation provided when claims denied
• No identified process/procedure

Due to mounting pressure, the GCCF is offering victims immediate final payments for less than the value claimed. To receive this final, immediate payment, claimants must relinquish their right to pursue litigation against BP in the future. These people face the unfortunate decision of having to decide between accepting less compensation due to an immediate financial need or risk waiting for greater compensation that may take longer than anticipated to arrive and offers no guarantee of being a greater sum than a final payment.

According to the final protocol released by Feinberg on November 22, 2010, to address payments to oil spill victims, “Claimants will have a choice. They can accept a lump sum final payment for all present and future damage and surrender their right to sue by signing a full release, or they can continue to receive quarterly interim payments based upon documented past damage for that three month period; however, there is no guarantee that, in the future, a lump sum final payment will be as generous as it will be currently.”

GCCF and Proposed New Claims Criteria

Read the full GCCF Protocol for Interim and Final Claims.