Friday, July 2, 2010

BP Disaster Fund: We Can't Afford to Pay All Claims

From The Age:

The man appointed by US President Barack Obama to manage BP's oil spill disaster fund has warned that ''there's not enough money in the world'' to pay all claims, and suggested home owners with plunging property values could lose out.

The warning from prominent US lawyer Kenneth Feinberg came as hurricane Alex disrupted clean-up operations in the Gulf of Mexico and pushed oil deeper into fragile coastal wetlands and once-pristine beaches.

Mr Feinberg, asked by Mr Obama to administer the $US20 billion ($A23.5 billion) claims fund, insisted BP would ''pay every eligible claim'', but cautioned that many perceived damages may not qualify.

''I use that famous example of a restaurant in Boston that says, 'I can't get shrimp from Louisiana, and my menu suffers and my business is off,' '' Mr Feinberg told the House of Representatives committee on small business.

''Well, no law is going to recognise that claim.''

He said he was still sorting out how to deal with indirect claims such as hotels that lose bookings because tourists think beaches are covered in oil, or people whose property values decline but who live several blocks from an oil-affected beach.

''There's no question that the property value has diminished as a result of the spill. That doesn't mean that every property is entitled to compensation,'' he said. ''There's not enough money in the world to pay everybody who'd like to have money.''