- - Monday, August 12, 2013

After the flood, the deluge. More than three years after the Deep Horizon oil spill that fouled the Gulf of Mexico, life would have almost returned to normal but for the feeding frenzy of the lawyers eager to take a bite out of the BP settlement fund.

When BP turned the waters and beaches black, tourists took their business elsewhere. Fishermen lost their livelihood. The owners of restaurants, bars, hotels, fishermen and seafood processors deserve to be fully compensated for their losses, but that’s not what’s happening. Those on the Gulf actually hurt by the spill are little more than chum for the trial lawyers. BP has spent $25 billion to clean up the mess it caused and compensate the economic victims in five states, but the money isn’t going where it ought to go.

According to BP, law firms have taken in average settlements of $812,000 each, triple what victim businesses are getting. Such largess comes in addition to the fees and billable hours that the firms are collecting as lawyers for businesses with legitimate claims. With more than $4 billion awarded to claimants so far, the lawyers expect to pocket $1 billion in fees. They’re taking one-quarter of the fund, even though the oil slick in the Gulf did nothing that could have created an actual loss for a lawyer.

In an interview on CNBC, Bob Dudley, the CEO of BP, faults the class-action plaintiff system for encouraging plaintiffs’ lawyers to file claims. BP has appealed parts of the settlement, citing what it calls “serious problems” with “flawed interpretation” of that agreement, leading to payouts for exaggerated and, in some cases, false claims.

Businessweek magazine in June cited as an example a Tampa lawyer whose three-lawyer firm has 260 clients with claims ranging from $20,000 to $4 million each. “The craziest thing about the settlement is that you can be compensated for losses that are unrelated to the spill,” the lawyer, Kevin McLean, wrote in a solicitation letter. Businessweek further cited a construction company in northern Alabama that was awarded $9.7 million, though it’s located 200 miles from the coast and does no work near the Gulf.

The Obama administration wants some of the “free money,” too, and is separately suing BP for $17.5 billion in environmental penalties, funds the environmental agency itches to redistribute in grants to litigious “green” allies. That’s what friends are for.

It’s only just that BP pay for the boneheaded decisions that led to the dumping of 200 million gallons of crude into the Gulf. Lawyers are entitled to fair fees for the work they do. But the feeding frenzy over BP, like the lawyers’ windfalls from the tobacco settlement of the late 1990s, is Exhibit A in the case for tort reform.

The Washington Times