About three weeks ago I reported (here) on an on-going debate related to Ken Feinberg, the administrator of the Gulf Coast Claims Facility. Several blogs, organizations and articles have argued that Feinberg is acting under a conflict of interest because he was not really simply managing the fund, he was getting paid $850,000 a month by BP to settle claims against BP and obtain releases of liabity for BP.
Now a federal judge has agreed with these allegations and ruled yesterday that it was misleading for Feinberg to call himself "neutral" or "independent" in administering BP's $20 billion oil spill victim compensation fund. The judge has ordered Feinberg to clearly disclose his role as acting for and on behalf of BP. Moreover, Feinberg must "[a]dvise claimants that the 'pro bono' attorneys and 'community representatives' retained to assist GCCF claimants are being compensated directly or indirectly by BP."
In the end, the judge has ordered BP, through its agents Ken Feinberg and any of their representatives, in any of their oral or written communications with claimants (including but not limited to websites, telephone scripts, personal contacts, release documents and correspondence) to
(1) Refrain from contacting directly any claimant that they know or reasonably should know
is represented by counsel, whether or not said claimant has filed a lawsuit or formal claim;
(2) Refrain from referring to the GCCF, Ken Feinberg, or Feinberg Rozen, LLP (or their
representatives), as “neutral” or completely “independent” from BP. . . .
(3) Begin any communication with a putative class member with the statement that the
individual has a right to consult with an attorney of his/her own choosing prior to accepting any
settlement or signing a release of legal rights.
(4) Refrain from giving or purporting to give legal advice to unrepresented claimants,
including advising that claimants should not hire a lawyer.
(5) Fully disclose to claimants their options under OPA if they do not accept a final payment, including filing a claim in the pending MDL 2179 litigation.
and, (6) Advise claimants that the “pro bono” attorneys and “community representatives”
retained to assist GCCF claimants are being compensated directly or indirectly by BP.
The judge's opinion is available here.
For a brief discussion of the opinion go to the PopTort blog, Legal Ethics Forum and the Wall Street Journal Law Blog.