Spill legal fees ruling not fair in all cases

Published 3:19 pm Thursday, January 12, 2012

The court ruling about potential legal fees in the BP oil spill litigation is affecting spill victims who opted to settle out of court, and that’s not fair. U.S. District Court Judge Carl Barbier, who issued the ruling, or the 5th Circuit Court of Appeals should quickly correct the order to ensure that people and businesses who stayed out of the BP litigation aren’t penalized.

At issue is Barbier’s decision to grant a controversial motion creating a fund that could eventually pay legal fees to plaintiff attorneys in the oil spill litigation. The attorneys in the so-called plaintiffs steering committee claim they have spent more than $11.5 million building a legal case against BP. Barbier, who was president of the Louisiana Trial Lawyers Association before his federal appointment, didn’t actually award any legal fees. But his decision required defendants and the states involved to begin holding back a percentage of settlements in case attorney fees are awarded in the future.

Barbier’s order, however, includes settlements through the Gulf Coast Claims Facility, the $20 billion out-of-court fund set up by BP and administered by Kenneth Feinberg. The fund was created to compensate oil victims without the delays and expenses of a long court battle, and those using the fund didn’t seek representation from the plaintiffs steering committee.

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Yet Barbier is requiring that 6 percent of settlements paid by Feinberg after Dec. 30 be set aside for potential payments to the plaintiffs’ attorneys. The judge also ordered that states and local governments must set aside 4 percent of any settlements, raising questions as to whether part of BP’s settlements for environmental damage would be spent to pay lawyers who had nothing to do with the environmental assessment.

Other parties to the lawsuit in Barbier’s court, several local parishes and Louisiana’s Attorney General Buddy Caldwell are crying foul, and they have a point. They argue that any move to reimburse plaintiff’s attorneys is premature considering that the BP case is not even set to go to trial until Feb. 27. They also argue that it’s inappropriate to force contributions to the attorney’s fund from people and companies who are settling through Feinberg’s entity. …

Caldwell plans to take the issue to the 5th Circuit Court of Appeals, and so do some attorneys who have resolved their clients’ cases through Feinberg’s process. The 5th Circuit judges should consider these filings expeditiously and should make sure that oil spill victims who filed through the Gulf Coast Claims Facility aren’t stuck with paying legal fees in a lawsuit they avoided.