Do the right thing. What more could we ask in the wake of a major disaster like the Deepwater Horizon accident? And yet BP’s experience in doing just that by stepping up to the plate with a quick settlement and extensive efforts to compensate business, private and government parties injured by the accident makes one wonder why any company would do the same in the future.
Testimony this week in the US Court of Appeals for the Fifth Circuit in New Orleans highlights how the BP settlement fund has been abused by claimants who sought compensation for damages they did not suffer or losses that had no connection to the Deepwater accident. BP has now paid out $12 billion in claims, but has halted payments in view of evidence that claims have been systematically paid to parties whose alleged injuries were not related to the accident.
Perhaps this should be no surprise given the plaintiffs’ bar’s vigorous recruitment of claimants for this massive fund. In addition to this usual feeding frenzy, preliminary findings of a court-commissioned independent investigation by former FBI Director and federal judge Louis Freeh suggest improper conduct in the administration of the settlement fund, perhaps rising to the level of fraud.
What does this say about the integrity of our civil justice system and its ability to quickly and fairly redress harms? Certainly it is another black eye, but even more unfortunate is the impact on legitimate claimants whose payouts will now be delayed as the court tries to get a handle on the situation. Worst of all is the disincentive this creates for future mass tort defendants to quickly and effectively do the right thing.
Linda Kelly is Senior Vice President and General Counsel at the NAM. She also serves as head of the Manufacturers’ Center for Legal Action, the leading voice of manufacturers in the courts. To read more about the Manufacturers’ Center for Legal Action, please click here.
Latest posts by Linda Kelly (see all)
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- Supreme Court Takes up NAM’s WOTUS Case - January 13, 2017