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ATLANTA - 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 here.
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 time.
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.
"I 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."