BILOXI, MS (WLOX) - About half of the 450,000 oil spill claims filed so far, have little or no proof of damages attached and will likely be denied. That's what Claims Administrator Kenneth Feinberg told the media during a Wednesday teleconference.
The lawyer responsible for administering the $20 billion BP damage fund discussed the outstanding emergency claims and outlined the process of "lump sum" settlements for claimants willing to take a "generous" final settlement, while giving up their right to sue BP.
Feinberg says people with legitimate claims don't need "perfect" documentation, but they certainly need some written proof to back up their claims. Feinberg also asserted that a large number of outstanding claims may be fraudulent.
The oil spill claims administrator introduced himself to the Mississippi Gulf Coast during a mid-July town meeting at the Coast Coliseum. He promised then and in subsequent meetings to fairly compensate those who can prove damages from the BP oil spill.
With the emergency claims deadline now passed, he hopes that many of the claimants will consider offers of lump-sum final settlements.
"I hope my lump sum payment will be sufficiently generous to take into account the unknown future that many people will see the wisdom of taking the lump sum payments and move on with life," said Feinberg.
He said he's been flexible with the process and willing to address mistakes, like giving the claims of casino workers a closer look after many protested they were unfairly overlooked.
But the administrator said far too many claims are falling short in the requirement to document damages.
"There may be over 450,000 claims, but as you can see, just from the statistics I've cited today, less than half of them have been paid as emergency payments. And a huge number of the remainder, I think, will be denied."
He said of the 450,000 damage claims already filed, roughly 125,000 were submitted with no documentation whatsoever to prove the losses. He said another 100,000 are claims where the documentation is woefully inadequate.
"A fisherman will apply and say, 'I lost $30,000 during the oil spill 'cause I couldn't fish.' And he attaches his fishing license, with no further documentation," he said.
And while many of the claims may lack documentation, a large number of others may actually be criminal.
"There are more than 1000 claims I've gotten so far where there is some skepticism on my part about fraud. Fraudulent claims. We've sent some to the Department of Justice," said the lawyer.
So far, more than $2 billion in emergency claims money has been paid out to about 150,000 people and businesses.
Feinberg reiterated that people who decide to accept final "lump sum" payments will give up their right to sue BP and forgo any chance to pursue "punitive" damages.
That stipulation has Mississippi Attorney General Jim Hood concerned. He said Gulf Coast attorneys general are still working to force Mr. Feinberg to be more "considerate" of the rights of our oil disaster victims.
"Until we finish our negotiations with Mr. Feinberg, I advise claimants against signing a release or accepting a final payment without first consulting an attorney," Attorney General Hood said Wednesday.
Learn more about the criteria for filing a claim, how to file a claim online, or where the nearest Gulf Coast Claims Facility is located at http://www.gulfcoastclaimsfacility.com/.