BP to Wave a Magic Compensation Wand

The following is a guest post by Blogger Jack Lundee:

A 20 billion dollar escrow account has been set aside for the victims laying claim to the recent BP oil spill conundrum. And while wildlife continues to die; ecosystems disseminate; and the overall quality of life decreases, the people of the coast find themselves in terrible financial trouble.

The sudden hault in business for people like George Barisich, a shrimp fisherman from Saint Bernard Parish, LA, finds his livelihood coming to a screeching hault. BP has yet to give George or anybody else really, a prediction as to when they’ll be able to get back to work. But for citizens like George it may be much more difficult than expected. Through proper litigation, George will be required to determine long-term damages before they are actually known.

To “make up” for such drawn out litigation processes, BP indirectly permits interim payments, which will be given out up to three months after the oil well had been permanently capped. A more detailed analysis portrayed these initial claims or interim payments to be at an estimated 220 million dollars, for close to 120,000 opened claims. Kenneth Feinberg, who was appointed by the White House last month to oversee the escrow account, states that there has yet to be one denial of claim. Feinberg demonstrates his candor and sympathy for the people of the Gulf by visiting the area and getting a better feel for what has been lost, and the damages to come. He’s also the one that outlined the interim agreement, claiming that suing BP for damages will create a highly expensive, drawn-out litigation process.
Tony Hayward, CEO of BP, despite a series of PR blunders and failed efforts to end the disaster, will remain in power. Although opinions vary, BP clearly states its support for Tony remaining in office in a recent article entitled BP Defends Embattled CEO (BP). With many large company stocks growing, like Niranjan Shah and his Globetrotters Engineering Corporation, BP’s continues to drop as more than $20 since April 2010.

Ed Sherman, a law professor at Tulane University mentions that Feinberg’s compensation process is similar to that of 9/11, however there aren’t any fixed variables here. The spills affects are so widespread; damage compensation will vary from person to person, and death tolls are the only remaining fixed variables. Nonetheless, Feinberg is doing what he can to further support the victims of the recent oil spill.

Whether or not the Gulf and the industry it has mothered for decades will pick up within the next couple of years is unanswerable by both BP and experts in the field. And for those seeking our fair compensation, BP is certainly taking measures to ensure such monetary relief. But will this temporary three month interim payment process suffice for those already struggling to get by? It seems as though the power is being placed in the hands of the people, whereas they’re given an opportunity to take an “educated guess” as to their future damages.

As the clean up proceeds, it’s only a matter of time before we see can see a more clear timeline, and take a deeper look into a financial recovery process that may or may not meet expectations.