US judge: Spill claims czar not independent of BP

NEW ORLEANS (AP) — The administrator of the $20 billion compensation fund for Gulf oil spill victims is not independent from BP and must stop telling potential claimants that he is, a federal judge said in a ruling Wednesday that may spur more people to sue rather than settle.

U.S. District Judge Carl Barbier said claims czar Ken Feinberg and any of his agents must change the way they communicate with people seeking money from the fund. The ruling came just hours after Feinberg released details on how final payments would be determined.

The ruling cuts at the heart of one of Feinberg’s central arguments that because he’s independent, thousands of people who have been denied money or less than they feel they deserve should trust his decisions. And it could prompt more people to sue rather than accept relatively quick settlements with the fund, raising the potential for further uncertainty and liability for BP.

AP
1/2/11