BP payment Tsar 'not independent'

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A US judge has ordered the administrator of the compensation fund for Gulf oil spill victims to stop telling potential claimants he is independent from BP

The embattled administrator of the £12.3bn compensation fund for Gulf oil spill victims is not independent from BP and must stop telling potential claimants that he is, a US judge ruled.

The ruling in New Orleans came hours after the fund tsar Ken Feinberg released details on how final payments would be determined.

US District Judge Carl Barbier said he was ordering BP, Mr Feinberg and any of their agents to change the way they communicated with people seeking money from the fund.

Judge Barbier said Mr Feinberg must clearly disclose in all communications that he was acting for and on behalf of BP in fulfilling its obligations as the responsible party under the Oil Pollution Act.

The judge stopped short of ordering changes to a release form that people who accept final payments from the fund must sign. He asked lawyers to submit additional briefs to the court on that, as well as address the question of whether BP was complying fully with the law in the processing of claims.

Mr Feinberg was appointed last June by BP and the White House to oversee the claims fund. His Washington legal firm was paid nearly £525,000 a month for its work through the middle of January, and now Mr Feinberg is discussing with BP how much he should be paid going forward.

Lead lawyers in hundreds of claims filed over last year’s Gulf Of Mexico rig explosion and massive oil spill had asked Judge Barbier to intervene in the communications between Mr Feinberg and fund claimants. The attorney generals in Mississippi and Louisiana have backed the motion and Florida joined in on Wednesday.

Among other things, they expressed concern with the requirement that people who accept final payments from the fund have to sign a release form giving up their right to sue any party deemed responsible for the disaster.

The lawyers have argued that those claimants should still be able to sue BP for punitive damages and other companies for compensatory and punitive damages.

The fund was set up by BP to compensate people for lost revenue following the oil well blowout off Louisiana. It has so far paid about 3.3 billion dollars (£2bn) to 168,000 claimants, but many are still waiting for money and thousands of others claim they were shortchanged. About half of the total 485,000 claims filed have been denied because of ineligibility or lack of documentation.

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