06/24/2010 04:25:00 PM EST
$20 Billion BP Escrow Fund To Cover Most Claims, Could Grow Larger
- The $20 billion BP escrow fund to compensate victims of the Gulf oil spill
will cover all claims against the company except for environmental cleanup and
could eventually grow much larger, Michael K. Rozen of Feinberg Rozen said
today at HB Litigation
Conferences' Oil in the Gulf: Litigation & Insurance Coverage Conference
Rozen is the partner of Washington, D.C.,
attorney Kenneth R. Feinberg, who was appointed by President Obama to
administer the fund on June 16.
"The fund covers anybody with a claim with the exception of
environmental cleanup," Rozen said. "Those will be covered separately. .
. . Otherwise, the full gamut of what is out there is our purview."
Rozen said BP is working now on the mechanism to pay out the
$5 billion required to be paid out this year. The remaining $15 billion
will be paid out in $5 billion increments in each of the next three
years. Rozen said that $20 billion may just be a start.
"I think our presumption is that whatever the legitimate
costs are of handling however many claims there will be, that will be the
amount of the fund. . .," he said. "Everybody has understood from the start
that this is a down payment."
Rozen said that, at the moment, he is not aware of any
attempt to get co-defendants Transocean, Cameron International, Halliburton and
Anadarko to contribute to the fund, although he added that he thought it would
"make good sense." He also said he would be "surprised" if the federal
government contributed to the fund.
Rozen said his firm's hope is to be "up and running" within
90 days and begin making emergency payments in a "very, very short" period of
Because there are many different types of claims, Rozen said
there will probably be different standards applied. Because claims are being
filed in many jurisdictions, Rozen was asked if it was possible that different
state laws would be applied.
"At the moment we don't have any definitive viewpoint as to
how that will be resolved," Rozen said, advising the attorneys in the audience
to submit recommendations. "It's an open issue. We recognize it's
an open issue."
Rozen said people won't be required to hire an attorney to
file a claim, and that personal injury claims will be handled.
think that BP is trying to do the right thing," he said. "Twenty billion
dollars, no matter what you think, is a lot of money."