BP set aside $20 billion to compensate businesses and people affected by their oil spill Think that’s enough?  Think again!  Try $63 billion!  So why such a low earmark?

Using the cost from the Exxon Valdez disaster in 1989 as a comparison, Exxon ultimately paid over $287 million in compensatory damages alone.  The Valdez leaked over 257,000 barrel of oil; BP spilled about 5.3 million barrels.  That’s $42 billion.  Adjusting for inflation, that’s $63 billion.

In my litigation experience, everything is up for negotiation.  Even if BP knows that they’ve caused over $63 billion in damages, if they can negotiate a smaller settlement with individuals and Gulf Coast companies.  They are probably estimating that they can save about 2/3 of the money that litigation or trial several years away could cost them.  Many of the people the are compensating would rather settle now for a smaller amount than delay the valuation of their cases at mediation or trial in the distant future.

Gulf coast people and businesses certainly should be offered compensation in an amount closer to $62 billion.  Why?  Because Florida alone has damages in that neighborhood:  Florida’s tourism is a $61 billion industry.  Even if the Sunshine State’s claims are justly compensated, where is the money for the people in the other states? 

Knowing that there isn’t enough money for all the injured parties, my advice is that if you have a BP claim, file your claim early.  Get all your documentation together to submit a package that can be easily processed.  You will only be compensated for losses you can prove, so tighten up the evidence you submit, and don’t leave any room for wiggling out of compensating you for your injuries.

Filed under: BP Oil Spill Claims by Yau Jo-Anne Wednesday, August 11th, 2010