By Andrew Restuccia - 12/13/10 06:02 PM EST
The administrator of BP’s $20 billion oil spill compensation fund laid out three new payment options Monday for those who suffered losses as a result of the Gulf oil spill.
The oil spill claims process, overseen by Kenneth Feinberg, has entered its second phase, in which victims of the spill must decide whether to accept final payment from the Gulf Coast Claims Facility (GCCF) or enter into litigation with BP in hopes of receiving more money. Feinberg has encouraged victims to seek compensation through the GCCF, warning that legal battles could last for years.
If claimants are unsure about their future losses, they can choose to accept quarterly interim payments, rather than a one-time lump payment. Claimants are eligible to receive interim payments through August 2013. If claimants go with interim payments, they will not have to waive their right to sue BP or other defendants.
Claimants can also opt to receive a one-time “quick pay” of $5,000 for individuals and $25,000 for businesses. That option requires claimants to give up their right to sue BP or other defendants, but the quick-pay option only applies to claimants who have previously received emergency compensation payments. The emergency payment period ended in November. Feinberg is currently doling out final compensation.
According to the latest GCCF statistics, more than 460,000 people have applied for relief under Feinberg’s program. More than 166,000 have received or been approved for a payment, and more than 230,000 claims have been denied. About 25,000 claims require more information to be processed, and just fewer than 40,000 remain “under review.”
Here is more detail on the three options, via a statement from Feinberg’s office:
1. "A lump-sum final payment for all documented past, present and future damage. Each eligible claimant choosing this option will be required to sign a full release giving up the right to sue BP and all other alleged defendant companies arising out of the explosion and spill."
2. "Quarterly interim payments for documented past damage. Some eligible claimants, uncertain as to the future of the Gulf, may be reluctant to accept a final payment. Interim payments will be available to such eligible claimants once every quarter until the expiration of the Facility in August 2013. Quarterly interim payments will be made for documented past damage not previously covered by emergency payments. No release will be required under this option."
3. "A one-time 'quick pay' amount of $5,000 for an eligible individual or $25,000 for an eligible business. This 'quick pay' alternative is only available to those eligible claimants who have already received an emergency payment from the Facility (over 166,000 individuals and businesses have received such payments). No further documentation need be submitted by any eligible claimant choosing this option. But a full release will be required. Claimants submitting claims for the first time or claimants who were denied emergency payments will not be eligible for this option but may file either a lump sum fully documented final claim or a fully documented interim claim."