For Gulf Oil Disaster Victims, Claims Processing May Be Improving

The first time Louisiana shrimp boat captain Louis Buteaux filed a claim with BP Plc to recoup oil spill losses, he was told he didn’t have enough paperwork to prove he actually was the skipper.

So he only got $2,500 for the month, rather than the $5,000 captains receive and nowhere near what he needs to pay his bills while the worst oil spill in U.S. history fouls his fishing grounds.

After driving three hours to get more paperwork, Buteaux marched into a BP claims center in Belle Chasse, Louisiana, with an inch-thick folder filled with tax returns and trip tickets to prove he actually owns a shrimp boat.

“Fishermen should be first in line,” said Buteaux, 69. “We need the money.”

Here in southeastern Louisiana fishing country, Buteaux’s comments are echoed widely. More than two months after the Deepwater Horizon rig exploded in the Gulf of Mexico, many area residents say the claims process is getting somewhat better, but bureaucracy still reigns supreme.

Adding to the red tape is that neither BP nor the government distributes the money. ACE Ltd’s ESIS, which helps reduce “claims frequency and loss costs” according to its website, mails checks from centers as far away as Delaware.

Sonia Mackey, an oyster boat deck hand, said her first check was eight days late.

“I think it was just delayed because of the postal system,” she said.

Kenneth Feinberg, an attorney and President Barack Obama’s newly appointed oil fund czar, has promised to streamline the process and even let some victims file claims online. He is open to paying lump sums for several months up front, rather than monthly, which would help fishermen who tend to receive most of their annual income during the busy summer months.

Feinberg ran the compensation fund for victims of the September 11, 2001, attacks, so he’s no stranger to Herculean tasks. But his latest job will force him not just to parse money, but to reform a claims process that seems intrinsically difficult to master.

Many of the claims centers BP has set up are hidden away with little signage to distinguish them. The Belle Chasse center is behind a fast-food restaurant in a small strip mall, with only two small signs in the window and nothing on the street.

One of the signs reads: “BP’s policy is no fraud.”

Feinberg said he will hire more local workers who understand the fishing and oil cultures. He is also changing the physical signage to reflect the program’s new name: the Gulf Coast-Feinberg Fund.

Under the new process victims will first receive emergency funding — much like Buteaux, the shrimp boat captain, did. Once the oil leak is stopped, claims officials will sit down with victims and determine a long-term damage amount, Feinberg said.

If victims accept the second pot of money, they have to agree not to sue BP or the government.

“If you decide you want to litigate, go ahead,” Feinberg said. “Is it a good idea? Absolutely not.”

Earl Hebert, who owns three fishing boats, said he’s had no problem getting his $5,000 check each month from BP.

“If you come with the right documents, you won’t have a problem,” said Hebert, 72.

But that document requirement is thwarting many.

Mackey, the deck hand, is worried that a second month’s check of $2,500 won’t come because she is paid in cash and doesn’t have detailed paperwork.

“Every time we went back to the claims center, it was something new, another problem,” she said.

Feinberg said he will require precise documentation, but promised to work with those paid in cash. However, for workers paid under the table — a way of life for some fishermen, especially immigrants — there is no such luck.

“There’s nothing wrong with getting paid in cash,” said Feinberg. “When you say ‘under the table’ that sounds to me like a violation of the federal tax laws and I cannot be distributing money in violation of federal law.”

(Editing by Mary Milliken and Jerry Norton)

Working with Adjusters to Get Claims Paid -Class at the Academy of Insurance