BP, 9/11 Fund Administrator Recounts Challenges Faced in Disasters

03.23.2011 | Law

The attorney who has distributed billions of dollars to the victims of the 9/11 terrorist attacks and the BP oil spill told an audience in Keller Hall that he thinks these kind of efforts are "sound public policy," but cannot be replicated for most situations or tragedies.

Kenneth Feinberg, who oversaw the U.S. Government's September 11th Victim Compensation Fund and currently serves as the administrator of the BP oil spill compensation fund, described the work for which he is best known "one-off examples" and "precedent for nothing."

All were unique situations in which the court system — or as he put it, "the conventional way we resolve adversarial disputes" — would have been "ill advised," he said.

Feinberg discussed his work during a public talk, "Unconventional Responses to Unique Disasters," in the University of Dayton School of Law's Heck Courtroom on March 22. The program, which was sponsored by LexisNexis, also included remarks from Dean Lisa Kloppenberg; Jay Folberg, former dean of University of San Francisco School of Law; and Dayton law professor Thomas Hagel.

Feinberg has overseen other special compensation funds, including ones for the victims of the 2007 Virginia Tech shooting, Agent Orange victims and TARP Executive Compensation, for which he is often called the "pay czar."

All of these funds, he said, are "wonderful" efforts to help people, but they create "animosity from victims of other tragedies" who sometimes question why their circumstances do not warrant a high-profile settlement.

The BP oil spill fund has also created controversy about the amount and pace of the payouts. Feinberg said that the Gulf Coast Claims Facility has received approximately 500,000 claims from individuals and businesses in the Gulf alleging damage due to the BP oil spill. The fund, which will remain in existence until August 2013, has processed about 200,000 claims in the past seven months and has paid out $3.6 billion, according to Feinberg.

"Nobody is happy," he said. People in the Gulf say he's "too cheap" and working too slowly, while BP says he's too generous and that there is "no more damage."

"So I must be doing something right," he said.

Some of the challenges he faces in administering the BP fund are determining what exactly makes a claim eligible. It's one thing to compensate a hotel in Pensacola, Fla., where oil has washed up on the beach, he said. But how do you try to compensate a dentist whose office is five miles from the beach who claims he lost half his practice because so many of his patients were fishermen? he asked.

"What we're trying to do in BP is to come up with a methodology to determine eligibility and calculations of damages," he said.

The 9/11 fund, he said, involved a different challenge: calculating how much to compensate victims of the attacks. He recounts his experience in his 2005 book What Is Life Worth? The Unprecedented Effort to Compensate the Victims of 9/11.

Feinberg, who founded Feinberg Rozen in 1992, focuses much of his legal work on mediation and alternative dispute resolution. He is also an adjunct professor at the Georgetown University Law Center, Columbia University School of Law and the Benjamin N. Cardozo School of Law. In 2004, he was named "Lawyer of the Year" by the National Law Journal and has been named repeatedly as one of "The 100 Most Influential Lawyers in America" by the National Law Journal.

Once his work on the BP fund is complete, he said, he hopes he can return to doing standard ADR work, "but we know there will be another tragedy."

For more information, contact Bob Mihalek, communications specialist at the University of Dayton School of Law, at 937-229-4683 or bob.mihalek@udayton.edu.