Shakedown or not, the $20 billion fund British Petroleum will compensate Gulf Coast residents from for the spill is going to provide some needed help.
While all the details of how it will work aren't yet final, here is a general rundown of what's known so far, what it will and won't provide in compensation and how to file claims.
How it has worked: Up to now, individual claims had to be filed with BP. They were then processed by BP's contractor ESIS and BP made a determination of whether to pay them.
Victims dissatisfied with BP's decision could file a claim with the federal Oil Spill Liability Trust Fund (a fund that was established by Congress after the 1989 Exxon Valdez oil spill) or go to court. So far, more than 66,000 claims have been filed and more than $81 million disbursed, but there have complaints that slow processing was endangering families.
The $20 billion fund as announced by President Obama and BP will change that.
How it will work: The White House blog says that the agreement for the $20 billion fund will completely remove BP from decisions on claims validity and on the amount to be paid.
Instead, both will be decided by a body to be called the "Independent Claims Facility." It will be run Kenneth Feinberg, who administered the 9/11 Victim's Compensation Fund. Decisions on claims are supposed to be made within 90 days of a claim being filed.
The administration is promising that the switch from BP processing will be seamless. Victims should go ahead and use the current claim forms.
Appeals: An additional step will be added for victims dissatisfied with any claim determination. A three-judge panel will serve as the first step in appealing any decision by the fund administrator. Victims retain the option of seeking money from the Oil Spill Liability Trust Fund or heading to court. BP can only appeal claims over $500,000.
Who can and can't file: The fund is aimed at individuals and businesses harmed by the spill, according to the White House blog.
That includes fishermen, hotels, restaurants and many others. Claims by local, state, tribal and federal governments, including those to repair environmental damage, still have to be filed with BP and will be separately handled. Rig workers who lost their jobs will get unemployment compensation from a separate program that is funded through a $100 million contribution from BP.
How often can claims be filed? Very often. With the length of the spill's impact still unknown, the plan is to offer victims the chance to file multiple claims based on losses to date.
How will the validity and amounts to be paid be determined? That's still uncertain. The White House blog said Feinberg will develop standards for recoverable claims that will be published.
What if the $20 billion isn't enough? White House officials say the fund is an initial down payment toward claims but not a liability cap.
How quickly will claims be paid? Hopefully faster. White House officials didn't offer a specific time but made clear they wanted something faster.
The administration in announcing the new program said a major target was speeding up the processing of claims.
"There is a claims process today. We all realize it's not working the way we want it to work," said Carol Browner, assistant to the President for energy and climate change, at a White House press conference announcing the agreement. "That's part of why we reached this agreement. What this gives us is the assurances so that we can make sure that the people, the small businesses that have been impacted can get their claims paid in a timely manner."
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