The BP Class Action Settlement Agreement and Williams Kherkher’s Success
Posted on Friday, June 28th, 2013 at 4:42 pm
BP’s New Ad Campaign
Many of you have probably seen BP’s full-page ad in the Wall Street Journal and other newspapers. In this ad, BP states “trial lawyers and some politicians are attempting to capitalize on this misinterpretation by encouraging the submission of thousands of claims for inflated losses, or losses that do not even exist.” The “misinterpretation” referenced in this ad is the so-called “matching” issue, which has been something we’ve addressed previously.
BP’s statements are demonstrably false and a thinly-veiled effort to intimidate the victims of the Gulf Oil Spill. BP appears to suggest that the victims of BP’s criminal acts – the very acts that directly caused the Gulf Oil Spill – are engaging in wrongful behavior by submitting claims using the rules and formulas that BP insisted were fair and reasonable. In other words, BP is complaining that the Class Action Settlement BP created is unfair to BP (even when that Settlement is being administered exactly consistent with the clear letter of the Agreement). BP apparently does not believe in the old-saying “a deal is a deal.” Try as it might, BP cannot spin the fact that it is trying to renege on its contractual obligations to the victims of the Gulf Oil Spill.
We do not disagree that it is wrong for individuals and companies to get money they don’t deserve. Ironically, that is exactly what BP is trying to do with its new ad campaign. What BP does not say in the ad is very telling: any funds that remain after the expiration of the April 22, 2014 claim deadline revert back to BP. This means that if BP is successful in intimidating victims, then BP gets to keep the money legally owed to these victims. We think that is wrong, and hope that the public will not be fooled by BP’s double-talk.
Our clients are only too aware of how difficult it is to get a claim paid. The Claims Administrator employs hundreds of lawyers and accountants (all paid by BP) who double and triple check every aspect of the claim documentation before issuing an Eligibility Notice. After that, BP has the right to appeal the Eligibility Notice. Claimants who successfully traverse this process are clearly legitimate victims that deserve to be paid.
BP Threatens to Seek Recovery of Disbursed Funds.
BP has also instructed its army of lawyers to start sending letters to certain claimants advising them that BP may attempt to seek recovery of settlement proceeds. This, as with the ad campaign, is nothing more than a baseless scare tactic.
First, the Settlement Agreement provides absolutely no mechanism that would allow BP to seek recovery of disbursed funds. In fact, the Settlement Agreement provides for the exact opposite, since by definition no claimant can obtain a payment until: (i) they have successfully traversed the Settlement Program to obtain an Eligibility Notice; (ii) they have successfully overcome any BP appeal; and (iii) they have delivered a signed Release. After the Settlement Program disburses funds that, quite simply, is the end of the process. If BP wanted to have a mechanism to recover funds, it should have negotiated for that in the Settlement.
BP’s threats are also undercut by a recent decision of the Fifth Circuit Court of Appeals. The Fifth Circuit, which will eventually hear BP’s appeal on the “matching” issue, already denied BP’s request to stay payments from the Settlement Program. If BP had a legitimate basis for its appeal the Fifth Circuit would almost certainly have granted this request. Frankly, BP’s actions smack of desperation. We will continue to disburse funds to our clients as soon as we receive them, and we do not believe that our clients should worry about BP’s empty threats. We have carefully reviewed each of BP’s arguments in support of the fanciful notion they can ignore their Settlement and try and recover money from the victims of the Oil Spill, and believe they are completely lacking in merit. We expect you will see quite a bit of media attention about this issue in the coming weeks and will keep you posted.
Comparing our Results to the National Average.
There are currently hundreds of law firms and accountants who are submitting Oil Spill claims, and it can be difficult for a client or local CPA firm to know who has been successful in getting claims paid (as opposed to just having a slick website and marketing campaign). To that end we’ve started comparing our claim performance against the national average by comparing our DWH 8127 Reports to the overall reports prepared by Claims Administrator Pat Juneau. You can download the Claims Administrator’s reports at the following link:
The June 11, 2013 Report provides useful statistics that allow us to compare our own results to the national averages. The Claims Administrator tracks: (i) the total number of claims submitted; (ii) how many claims received an Eligibility Notice (the notice a claimant receives when the claim has been determined to be valid and payable); (iii) how many claims received Incompleteness Notices (the notice a claimant receives when the Settlement Program needs more information to proceed); and (iv) how many claims received Denial Notices (the notice a claimant receives when the Settlement Program is denying the claim). Obviously the Denial Notice is the worst result possible, as it means the Claimant is not getting paid.
The results indicate that: (i) we have amongst the best (if not the best) results of any law firm in the country; (ii) our competition is not getting claims paid; and (iii) our competition is receiving denial notices about one-third of the time:
Claims that Receive a(n): Eligibility Notice Incompleteness Notice Denial Notice
National Average 17% 47% 34%
Our Average 94% 5% 1%
We believe these statistics also underscore that the Settlement Program simply won’t pay inflated, fraudulent, or incomplete claims. BP’s suggestion that thousands of people are getting windfall awards is directly contrary to the actual statistics. The fact is getting a claim paid is hard work, and very few of our competitors appear to be having much luck with it.
Update on Appeals.
BP has the right to appeal any Eligibility Notice over $25,000. To date, BP has appealed 1,699 claims, of which about 20% were Individual Economic Loss (“IEL”) claims and 80% were Business Economic Loss (“BEL”) claims. As the following table of national statistics regarding claims appeals shows, overall BP has been very successful in challenging awards through the appeals process:
Claim Type IEL BEL
BP Prevailed 83% 50%
Claimant Prevailed 15% 49%
Remanded 2% 1%
Please note that typically when BP prevails on appeal the Claimant receives no payment. In comparison, our results on appeal are dramatically better than the national average:
Claim Type IEL BEL
BP Prevailed 5% 0%
Claimant Prevailed 90% 96%
Remanded 5% 4%
To date, we have won over 94% of our appeals and expect to continue this record (in fact, we’ve currently only lost 1 Individual Economic Loss appeal, and even on this claim the claimant still obtained a substantial award). These statistics also undercut BP’s claims that they have no protection against inflated claims. In truth, BP has had great success against our competition in the appeals process. Thus, if you have suffered either personal or professional losses due to the oil spill, find out if you are eligible to file an oil spill claim by calling Williams Kherkher at (888) 220-0640 or using our oil spill claim calculator.