NEW ORLEANS – A statewide legal watchdog has issued a report detailing the millions of dollars local attorneys and court appointees have received for their work on the 2010 BP Deepwater Horizon settlement fund.
Non-partisan legal watchdog Louisiana Lawsuit Abuse Watch (LLAW) released a report Monday detailing the hundreds of millions of dollars in legal fees attorneys have received for representing oil spill claimants as well as the administration costs associated with the Court Supervised Settlement Program (CSSP) that is tasked with processing and paying hundreds of thousands of claims associated with the economic claims against BP stemming from the oil spill.
CSSP chief Patrick Juneau has been the target of much criticism since taking over the claims paying process in March 2012. Juneau’s personal salary for serving as the court’s claim administrator is $3.5 million per year.
In addition to shedding light on the high cost of compensation for court officers such as Juneau, LLAW's report points out questionable costs revealed in the CSSP’s 2013 audit including $9.5 million in office expenses, of which $600,000 was for office supplies, and $6.4 million for travel expenses, of which $1 million was spent on meals and $2 million was spent on hotels. LLAW points out that for every $6 paid to claimants, $1 was spent in administrative costs, or an average of $11,000 in administrative costs per claim.
“These outrageous administrative costs make it perfectly clear who is benefiting the most from the oil spill settlement—and it is not the victims,” LLAW executive director Melissa Landry said.
Meanwhile Juneau’s pace at resolving claims has been criticized as abundantly slow with a backlog of more than 145,000 claims that have been processed by his office that have yet to be paid. With the fifth anniversary of the Deepwater Horizon oil spill approaching, critics have pointed out that if the current processing rate continues, many claimants could still be waiting years before they receive a payment from the claims facility.
In addition, LLAW points out that just three law firms account for 13 percent of the total dollar amounts paid from the oil spill settlement thus far.
“How much of that has gone to victims?” the LLAW report asks.
Altogether, the Minneapolis-based Faegre, Baker, Daniels LLC, Mobile-based Cunningham Bounds LLC and Belle Chasse-based Cossich, Sumich, Parsiola & Taylor LLC– have received nearly $430 million from the settlement fund.
“Class action lawsuits are notorious for producing highly lucrative legal fees, but the lawyers and administrators profiting off of the BP settlement have brought this unscrupulous practice to a whole new level,” Landry said. “Transaction costs stemming from the oil spill settlement are easily the largest in American history, with $471 million being spent on administrative overhead in 2013 alone. That’s nearly a half a billion dollars—or about what it cost to run the entire City of New Orleans that year.”
Landry said when the gross expenditures on the oil spill settlement program are closely scrutinized, it is obvious who is benefiting most from a program that was meant to help the hundreds of thousands of Gulf Coast residents and businesses negatively affected by the oil spill.
“While 145,000 disaster victims await their payments, lawyers and administrators are getting rich. Obviously this is not what the settlement was designed to do and something needs to change immediately,” Landry said. “We urge U.S. District Judge Carl Barbier who is overseeing the case to take a close look at how the settlement is being administered and make the necessary changes. After all, this case is first and foremost about the people, the families, and the businesses that were affected by the spill-- not the lawyers and administrators who showed up in its aftermath to profit from it.”
Juneau did respond to a request for comment on LLAW’s findings and criticisms.