The $20 billion that BP has set aside to pay for losses caused by the Gulf of Mexico oil spill will start making payments in early August.
Ken Feinberg, who is in charge of paying individuals and businesses for lost income, told a meeting of government officials in Louisiana today that he expected a seamless transition from BP management to his administration.
"My goal is to improve that system," Feinberg said. "I'm determined to come up with a system that is more beneficial to the people using it."
BP currently has 35 offices in the Gulf Coast area accepting claims. The oil company will turn the entire operation over to Feinberg and not be involved in any of the claims against the $20 billion fund, except to supply more money if it's needed, Feinberg said.
The offices will be open for three years, and claims can be filed at any time, he said. Once filed, they must be paid within 90 days, Feinberg said.
The fund has not been tapped yet, but Feinberg said by the end of the first week of August his group would be ready to make payments.
There are still some issues to settle, Feinberg said. One of them is how much transparency the fund should have. Data from the program will be available, but there is still debate on providing names of people applying.
Feinberg, who was in charge of the compensation paid to families of victims in the Sept. 11, terrorists attacks, said he worried that making names public or turning them over to government agencies would have a chilling affect on applicants.
"I do not want to create barriers to people participating," he said.
Feinberg said anyone who has a claim and can document it should apply.
BP has committed to paying up to six months' lost wages. They are also offering to reach lump-sum settlements for other, potentially larger claims, such as commercial fishermen convinced their business won't recover for years. Those claims will be mediated by Feinberg. If that lump sum payment is accepted, the recipient must sign an agreement not to sue BP.
Anyone who doesn't accept a settlement can still claim the six month's loses without losing their right to seek more in a lawsuit, Feinberg said.
"I believe that any claimant in Louisiana who is eligible is making a mistake, a big mistake, not to come into this program," he said.