As deadline looms for Deepwater Horizon claims, plaintiffs’ attorneys prepare for huge payday

NEW ORLEANS – With the deadline for submitting a Deepwater Horizon claim less than a month away, the powerful group of attorneys who settled the class action litigation stemming from the 2010 Gulf oil spill stand to make more than $2.5 billion for their work on the case.

The deadline to submit a claim in the economic and property damages settlement with BP related to the Deepwater Horizon oil spill is June 8.

Once that deadline passes a group of 17 attorneys selected by U.S. District Judge Carl Barbier to oversee the case as members of the Plaintiff's Steering Committee (PSC) will prepare to split up the massive legal fees. Under the settlement, members of the PSC are entitled to split a minimum of $660 million in compensation for overseeing the BP settlement as well as 6 percent of each claim paid–this is in addition to contingency fee payments received for representing their own claimants in the case.

Daniel Becnel, a Reserve-based plaintiffs’ attorney who specializes in class action lawsuits, was the first attorney to file multi-district litigation against BP over the oil spill.

Becnel, who was not picked by Barbier to join the PSC, has opposed the settlement from the beginning and has been critical of the way the suit has been handled on behalf of class members.

“They wrote the plan and they went and got the plaintiffs that fit the plan and they made a fortune,” he said of the PSC members.

Becnel said claimants should only be charged minimal legal fees and that the settlement architects emphasized that the claims system was designed to be claimant-friendly and filing claims did not require a lawyer’s involvement.

Just over a month after the oil spill was contained, BP hired Kenneth Feinberg to begin issuing compensation payments directly to claimants. Over a two-year period Feinberg paid $6.1 billion to 221,000 claimants with little to no court oversight, before he was eventually removed at the request of the PSC and replaced by court appointed claims administrator Patrick Juneau.

Becnel, an early supporter of Feinberg, said the Washington, D.C.-based attorney and arbitrator should never have been replaced.

“What did he do wrong?” Becnel said. “He turned down people who didn’t have proof [that they were damaged by the oil spill].’”

Sherman “Tiger” Joyce, president of the American Tort Reform Association, said the billions of dollars in legal fees the PSC is set to receive is in effect taking money that should go to those damaged by the spill.

According to Joyce, the PSC took no risk in settling with BP who clearly wanted to put the spill behind it.

“The money has been, in effect, almost appropriated in this case by the source,” Joyce said.

In fact, both Juneau and his predecessor Feinberg have said claimants do not need to be represented by attorneys to receive fair settlements.

Joyce said he hopes Barbier takes into account the actual work the lawyers put into the case.

“I think the burden is on them to demonstrate and I hope the court will look carefully at this and whether if some of this money should be diverted to other potential claimants or just not paid out at all,” Joyce said.

Ultimately, it is up to Barbier to determine what the PSC members should be paid.

Attorney Steve Herman, co-lead counsel of the PSC, declined to comment on this story.