If BP gets its way, Claimants to the oil giant’s $20 billion oil spill fund may soon be required to transfer to the company their right to sue other Defendants. This move would help BP’s efforts to collect billions of dollars from its business partners. The proposal is part of a final set of rules being circulated by none other than fund administrator Kenneth Feinberg. This is the man who has been making it so hard on shrimpers, hotel owners, restaurateurs and others on the Gulf Coast seeking compensation. The proposed rule, according to a report by Reuters, would offer victims an opportunity for full payment for documented damages. But full payment would be determined by Feinberg.
Such a document would give BP a powerful tool in its efforts to get contributions to the compensation fund from other corporate wrongdoers, including Halliburton Co. and Transocean Ltd. “I think the most significant thing about this is it reconceptualizes the fund as not just BP’s share but BP trying to settle all the claims with whoever accepts it and then being able to go after the others for a contribution,” said Bob Percival, a professor at the University of Maryland School of Law in Baltimore. Language in the draft proposal requires that Claimants transfer, or subrogate, their legal rights to BP. Claimants would sign over their right to sue those responsible for the spill. BP would then go after its partners for a portion of the claims it paid. That could be worth billions of dollars if BP is successful. This is a clever attempt to shift the loss to other companies.
Halliburton has moved to defend itself against BP. In a court filing, the company said it did not intend to waive a $75 million legal cap on its liability from the spill and said that cap would apply toward efforts by others to get a contribution toward their settlements. BP has waived the cap and has encouraged its partners to do the same. It should be noted that the cap does not apply in cases of gross negligence or when federal safety regulations have been violated.
Source: Insurance Journal
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