BP Spill Fund Rules May Help Oil Giant Recover Payouts from Contractors

People seeking to collect damages from BP’s $20 billion oil spill compensation fund may be asked to sign over their rights to sue other firms linked to the April disaster, a move that could help BP recover a portion of the payouts.

Reuters reports that the provision appears in a draft proposal being circulated by Kenneth Feinberg, who was appointed to oversee the fund created after the oil well blast that killed 11 oil rig workers and led to the worst oil spill in U.S. history.

Under the proposal, BP would be expected to pay full compensation for spill-related damages. In return, the beneficiaries would transfer to BP the right to seek recovery from contractors such as Transocean, owner of the Deepwater Horizon oil rig, and Halliburton, cement contractor on the doomed well.

“They are trying to shift the loss to other companies,” Michael Steenson, a law professor at William Mitchell College in St Paul, Minn., told Reuters. “They are trying to get out of it at least some of what they put in.”

The arrangement is similar to that used by insurance carriers who pay claims to injured motorists, then seek to recover the money from the negligent driver.

The proposed changes could be made as early as next week, when the fund would shift from partial emergency payouts to final payouts. The proposal outlines a course of action for the fund similar to the one followed by the 9-11 compensation fund, which was also administered by Feinberg.

Feinberg told Reuters that that the proposed changes are not a done deal, and that he will make a decision about the rules for final payouts in the near future.

More than 300,000 people and businesses have filed claims, which have resulted in more than $2 billion in payments so far.

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