- Associated Press - Thursday, December 30, 2010

NEW ORLEANS (AP) — The administrator of the $20 billion fund BP set up to compensate Gulf oil spill victims is using money from it to pay for advice from a law professor who backs his assertion that he is independent from the oil giant.

A spokeswoman for the Gulf Coast Claims Facility told the Associated Press on Thursday that fund czar Kenneth Feinberg has agreed to pay for advice from Stephen Gillers, a New York University law school professor who produced a letter that says Mr. Feinberg is neutral and not subject to BP’s control.

Some victims, lawyers and state officials unhappy with the claims process have questioned Mr. Feinberg’s independence and suggested he is a pawn in a BP effort to limit its liability.

A statement Thursday from the fund said Mr. Feinberg asked Mr. Gillers for advice about a Nov. 24 letter from Louisiana Attorney General James “Buddy” Caldwell questioning the independence of the fund and Mr. Feinberg’s role as the independent administrator.

In a letter to Mr. Feinberg, Mr. Gillers wrote: “You are not in an attorney-client relationship with BP. You are an independent administrator and owe none of the attributes of the attorney-client relationship (e.g., loyalty, confidentiality) to BP. By ‘independent’ I mean (and I think the context is clear) that you are independent of BP. You are not subject to its direction or control.”

Spokeswoman Debra DeShong Reed couldn’t say how much Mr. Gillers is being paid, only that it will be an hourly rate.

“We’re waiting for the invoice,” Ms. Reed said. “We’ve agreed to pay whatever it costs.”

Ms. Reed said neither Mr. Feinberg nor the fund has any past relationship with Mr. Gillers. She said he was chosen because he is a nationally recognized expert in the field of legal ethics.

She referred further questions to Mr. Gillers, who did not immediately return calls from the AP.

Lawyers who already have filed more than 300 lawsuits on behalf of Gulf residents and businesses say Mr. Feinberg should stop calling himself independent.

They asked a federal judge last week to order changes to the release form people must sign if they accept a final payment from Mr. Feinberg.

Mr. Feinberg currently requires people who accept final payments to agree not to sue BP or any other responsible party, including companies involved with the Deepwater Horizon rig that exploded April 20 off Louisiana’s coast.

The blast killed 11 workers and led to 200 million gallons of oil spewing from BP’s well a mile beneath the Gulf of Mexico, according to government estimates that BP disputes.

The lawyers say people should only have to give up the right to sue BP for compensatory damages, but they should still be allowed to go after BP in court for punitive damages. And, the lawyers say, people who accept final payments from the fund should be allowed to sue other responsible parties for both compensatory and punitive damages.

So far, the fund has paid out roughly $2.6 billion.

Money left over in the fund is expected to be returned to BP.

 

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