Louisiana Record

Tuesday, July 23, 2019

At current rate Deepwater Horizon claims program could take another decade to process payments

By Louisiana Record reports | Feb 5, 2015

NEW ORLEANS – In the strongest signal yet that the BP Deepwater Horizon oil spill settlement process has ground to a halt, newly revealed court documents show that the number of claims being paid by Claims Administrator Patrick Juneau are now fewer than the number of new claims coming in.

A report filed in court this week by Juneau, whose settlement operation has about 3,000 employees and a budget of more than $40 million a month, shows that nearly five years after the Gulf oil spill the claims facility managed to get out checks to only 1,557 claimants during the month of December. Meanwhile, Juneau's report said 2,125 new claims came in during the month, adding to a backlog of more than 145,000 at the facility.

Over the latter half of 2014, Juneau reported paying a mere 6,541 claimants, a rate that if it continues may mean it will take up to a decade to process all claims. This apparent lack of progress stands in contrast to the massive and expensive claims processing operation Juneau is running, which, according to court documents, costs roughly $475 million per year to operate.

In recent months trial lawyers from across the region affected by the oil spill have voiced their displeasure about Juneau, who they say has effectively shut down the claims system. In fact, Beaumont, Texas-based attorney, Brent Coon went so far as to file papers in court last fall complaining that some 5,000 of his claims have been held up by Juneau's staff without explanation.

Plaintiffs attorney Daniel Becnel, of LaPlace, who represents several claimants, said the slow pace has been very difficult for those who were hurt most by the oil spill.

“I think what’s going on now is unconscionable,” he said. “I have an oyster fisherman who has not yet been paid and he lost his crop almost five years ago, and he has been in that business for 55 years, and his son is in that business, and he hasn’t been paid.”

Becnel said Juneau, who collects a salary of $3.5 million a year, has every incentive to delay payouts as long as possible.

While the root of the lag in the claims process is unclear, some trial lawyers say BP is at a fault for burdening the claims facility by appealing awards. However, this accusation is not supported by the record. According to Juneau's report, BP has only appealed about 7,000 of the 300,000 total claims that have been filed.

Others have pointed to an ongoing fraud investigation by auditors as well as shoddy work practices for the reason Juneau's operation is all but stalled. In fact, under Juneau's watch at least five senior executives have resigned or been forced out after coming under suspicion for unethical behavior. In addition, Louis Freeh, a former FBI director, has uncovered several instances of claims fraud in the 18 months he has spent investigating Juneau's operation.

Melissa Landry, executive director of Louisiana Lawsuit Abuse Watch, slammed Juneau’s work in charge of the claims program.

“This unconscionable rate of inefficiency begs the question – who is really benefiting from the settlement?” she said. “Lawyers and administrators make millions while more than 100,000 victims await their payments. That’s not how this claims process was supposed to work and it illustrates that something has gone terribly awry.”

On. Feb. 3, the U.S. Court of Appeals for the Fifth Circuit heard a motion from BP asking that Juneau be removed as the head of the claims operation. In its pleadings, BP accused Juneau of dishonesty and incompetence. It is unclear when the appellate court will rule on BP's motion.

Juneau did not respond to a request for comment on this story.

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