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OIL SPILL LEGAL NEWS, Vol. 3, The Oil Spill Claims Process

06.10.10

BP has accepted its designation as a Responsible Party and states that it "is committed to paying legitimate claims for other loss and/or property damage caused by the Deepwater Horizon incident." As required by the Act, BP announced a process for the presentment and payment of claims. To facilitate that process, claims can be filed with BP over the telephone at 1-800-440-0858 or online at www.bp.com/claims. BP will require an inspection and/or photographs of the damaged property along with a supporting repair estimate or documentation to support claims for loss of business income. BP may make interim payments to individuals and companies that suffer ongoing business interruption and loss. Those interim payments do not preclude recovery for damages not reflected or settled as part of an interim claim. If a claim is rejected, BP is to notify the claimant in writing.

It is important for any claimant to keep copies of all claim documentation submitted to BP. Likewise all communications from BP, including denial letters, should be kept. These records will be needed to make a claim to the Trust Fund.

The Act mandates that claims for recovery costs and damages must be made to the Responsible Party prior to filing private lawsuits against the Responsible Party under the Act or making claims to the Trust Fund. If BP fails to settle the claim within 90 days after the date the claim is presented or denies the claim, the claimant may pursue a claim in Court or present a claim to the Trust Fund. Whether a claim should be pursued in court or against the Trust Fund should be evaluated with legal counsel on a case-by-case basis. Prospective claimants will need to consider the state in which the damages occurred and whether state law provides an avenue of recovery. The potential for recovery under federal law should also be evaluated with careful consideration given to the costs and timeframe involved in pursuing claims in both the state and federal venues.

It is important to keep in mind that time limitations exist for filing claims both in court and to the Trust Fund. Time limits for claims made in court will depend on the claim asserted and the jurisdiction in which the claim is made. Most claims by private persons for damages must be made against the Trust Fund within three years from the date on which the injury and its connection to this spill was reasonably discoverable with the exercise of due care. Claims to the Trust Fund for the costs related to removing oil or preventing, minimizing or mitigating oil pollution have a six-year limitations period that runs from the date of completion of all removal actions.

The Code of Federal Regulations sets forth the type of damages recoverable from the Trust Fund, who can make each claim, and the particular requirements necessary to establish each claim. The claim process varies depending on the types of damages claimed. Legal advice should be sought to ensure compliance with these regulations before making a claim against the Trust Fund.

Waller Lansden will continue to monitor events and issues related to the Gulf Oil Spill. For more information, please contact us at 800-487-6380.

The opinions expressed in this bulletin are intended for general guidance only. They are not intended as recommendations for specific situations. As always, readers should consult a qualified attorney for specific legal guidance.