BP writes letter saying GCCF payments have been too high
In a letter posted on the Gulf Coast Claims Facility (GCCF) Web site Thursday morning, BP states that there "is no credible support for adopting an artificially high future loss" and that claims payments should be lower going forward.
A 25-page letter cites the same data presented by GCCF administrator Ken Feinberg when he released a new set of rules for the claims process in January. BP claims that Feinberg is overestimating the damages owed to claimants.
"Solely for the purposes of the GCCF settlement process, it would be appropriate for the GCCF to use a future factor in the range of 0.25-.050 (or 25% - 50%) of a claimant's actually 2010 substantiated loss," the letter states.
Currently the GCCF is working under the assumption that claimants' 2011 losses will equal 70 percent of their 2010 losses and their their 2012 losses will equal about 30 percent of the their 2010 losses.
The letter comes after weeks of plaintiff complaints over BP's relationship with Feinberg and the GCCF.
Recently, U.S. District Judge Carl Barbier ruled that Feinberg was indeed acting as an agent of BP and ordered him and the GCCF to disclose their relationship.
The ruling came in the multi-district litigation (MDL) surrounding the BP oil spill in U.S. District Court for the Eastern District of Louisiana.
BP takes issue with three specific factors in GCCF's claims process.
The first is "the importance of substantiation" in which the oil company states some claimants did not provide "robust substantiation" for their emergency claims and "received payments that exceeded their actual loss."
The second issue brought up is Feinberg's plan to pay "most claimants an additional amount of 100 percent of actual demonstrated 2010 losses."
BP claims that economic data available to Feinberg and the general public provides "no factual support for the GCCF's proposed future loss factor."
A strong economic and environmental recovery by 2012 was the estimate given by Feinberg when the new GCCF rules were put in place.
BP states that GCCF contradicts its own findings and that "current data are acknowledged and set forth in the appendices to the Proposed GCCF methodology but is not actually reflected in the methodology itself."
Lastly, BP is asking that the $500,000 threshold for individualized evaluation of future losses should be lowered to $100,000.
"A lower threshold providing for individualized review in more cases will assure that any payment in respect of the risk of future loss is properly calibrated to the actual risk, if any," the letter said.
Federal MDL 2:10-md-2179