Friday, August 6, 2010

Shakeup at BP's claims system; incoming claims czar will drop BP’s contractor

Posted By on Fri, Aug 6, 2010 at 2:47 PM

Editor's note: Gambit is teaming and sharing resources with the independent non-profit journalism organization ProPublica in our reporting of the ongoing BP oil disaster. The following report is by ProPublica's Sasha Chavkin, with assistance from Amanda Michel.

In Shakeup, Incoming Spill Claims Czar Will Drop BP2019s Contractor

by Sasha Chavkin ProPublica, Yesterday, 8:33 p.m.

Kenneth Feinberg, the independent paymaster chosen by President Obama to administer damage claims from the Gulf oil spill, will drop the contractor that BP has been using to manage the claims process and hire two new companies to replace it.

Feinberg is expected to take over the claims system from BP in mid-August. He will replace BP2019s primary contractor for claims, ESIS Inc., with two other firms when he assumes control of the process, said Feinberg's spokeswoman Amy Weiss. She did not say why ESIS was being replaced.

BP's compensation system has been criticized by many applicants and so far made payments on only 28 percent% of claims. Applicants have described delays, unreturned phone calls and bureaucratic obstacles. Roughly $300 million has been disbursed to date; BP has agreed to set aside $20 billion to cover claims and other expenses.

Earlier this week, BP confirmed our report that the company has deferred decisions on thousands of claims until Feinberg takes over the process. Many of those claimants had not been informed why their cases had been placed on hold.

A spokeswoman for ESIS's parent company, ACE Group, has not responded to a request for comment on Feinberg's decision.

Patricia Wright, a spokeswoman for BP, confirmed that ESIS would be replaced, and said that the decision was made by Feinberg without BP's involvement. She said that BP was continuing to pay claims and that ESIS would stay on the job while BP retained control of the process. "Our contractors will continue to work until we transition," Wright said.

The companies that will replace ESIS, Garden City Group and the law firm BrownGreer, both specialize in the resolution of mass claims. BrownGreer was previously hired by Feinberg as a fee and expense analyst during his tenure as the executive pay czar overseeing compensation at banks that were bailed out by the federal government.

If you've filed a claim with BP, we want to hear about your experience. For more information about the claims process, check out our Unofficial Guide to BP Spill Claims.

Amanda Michel contributed reporting to this piece, and is coordinating our BP claims project.

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