NEW ORLEANS (CN) - A legal expert says aspects of BP's oil spill compensation fund made through its Gulf Coast Claims Center "do not comport with the usual standards for transparency and fairness." Kenneth Feinberg's law firm receives $850,000 a month while Feinberg oversees claims for BP. Tulane law professor Edward Sherman was hired by plaintiff counsel to determine whether the Gulf Coast Claims Facility is meeting expectations.
Sherman made the statement in a 5-page declaration submitted to U.S. District Judge Carl Barbier, who is hearing the consolidated complaints stemming from the Deepwater Horizon catastrophe.
Sherman wrote that a claims center should be established with standards of "independence, neutrality, and experience," should adhere to judicial supervision, and should be transparent about where its funding comes from.
Claimants should be told Feinberg was hired by and is paid through BP, Sherman wrote. He says this would help claimants determine for themselves whether Feinberg's statement that claimants are better off not litigating may be influenced by Feinberg's contract with BP.
Sherman's 5e-page statement is followed by an 11-page Curriculum Vitae that lists his legal expertise, including his former position as Dean of Tulane Law School, a teaching fellowship at Harvard Law, his alma mater, and an extensive list of publications, including casebooks for law schools. His experience included complex litigation, civil procedure and alternative dispute resolution. He has served as counsel, consulted with counsel, or served as an expert witness in a large number of class actions and complex litigations in federal and state courts.
Sherman claims the monthly $850,000 "fee arrangement" between BP and Feinberg's law firm, Feinberg Rozen LP, "contrasts with the usual method of payment of special masters, who are paid on an hourly basis according to the prevailing market rates in the community."
Citing BP's hiring of lawyers to work at its facility to field claims, Sherman wrote that "having a defendant pay for representation of claimants against it is far from the best way to insure legal representation, and raises questions about the adversaries of attorneys who counsel claimants about whether to accept an offer."
"It is my opinion that certain aspects of the GCCF's [Gulf Coast Claims Facility] operations concerning communications with class members, public releases and comments, requirements for release, and method of payment to attorneys for claimants do not comport with the usual standards for transparency and fairness expected of a claims phase of complex litigation," Sherman wrote in his declaration.
Feinberg and BP set up the Gulf Coast Claims Facility after the Deepwater Horizon catastrophe, as a "responsible party" is expected to do under the Oil Pollution Act of 1990. The ostensible purpose of the fund is to get money quickly to victims of the oil spill.
Critics of the fund have said BP has a second motive: to skew public perception of the disaster as it affects fishermen, seafood proprietors and tourism industry workers, and to reduce litigation resulting from the spill.
Quoting from a legal document put out by the Stanford Review, "The What and Why of Claims Resolution Facilities," by Professor Francis McGovern, the court-appointed special master in the Deepwater Horizon litigation, Sherman wrote: "There are a number of common threads that are critical to their acceptance by parties and claimants and to their success in fulfilling the objectives of the fund.