Getting what BP owes you

The Deepwater Horizon oil rig disaster has suddenly made “boom,” “skimmer” and “junk shot” part of the vocabulary for residents of the Florida Panhandle. But the Gulf spill is now also introducing such terms as “multi-district litigation,” “secondary claims” and “gross negligence” as the battle with BP and its oil shifts from the beach to the courtroom for many coastal residents and businesses. Experts say it’s vital to be prepared for what will likely prove a long siege with the oil giant. Their advice: Keep good records of lost business or bookings, check your existing insurance coverage, videotape before-and-after footage of property affected by the spill — and don’t be shy about making a claim.

Surviving the Big, Oily Mess If your business is a victim of BP’s gushing oil, you have legal recourse for compensation by BP. Here’s our guide to how to get what you’re owed. By John Kennedy Originally published in the Aug/Sep 2010 issue of 850 Magazine

The Deepwater Horizon oil rig disaster has suddenly made “boom,” “skimmer” and “junk shot” part of the vocabulary for residents of the Florida Panhandle.

But the Gulf spill is now also introducing such terms as “multi-district litigation,” “secondary claims” and “gross negligence” as the battle with BP and its oil shifts from the beach to the courtroom for many coastal residents and businesses.

Experts say it’s vital to be prepared for what will likely prove a long siege with the oil giant. Their advice: Keep good records of lost business or bookings, check your existing insurance coverage, videotape before-and-after footage of property affected by the spill — and don’t be shy about making a claim.

The $20 billion compensation fund BP has set up to cover economic damage along the coast is there to settle legitimate claims. And right now, there’s no telling how far courts may go in acknowledging losses tied to the April 20 explosion of Deepwater Horizon.

“The biggest questions remain largely unanswered,” said Wiley Horton, a Tallahassee lawyer specializing in commercial and intellectual property claims. “We still don’t know how far afield the damage claims will go.

“With oystermen, it’s fairly easy to determine they have a claim,” he added. “But when you try to make whole people who own commercial property away from the beach, that’s going to be a tougher claim. But it can be made.”

BP has opened 25 claims offices across four Gulf states. For now, those making claims usually are businesses or workers who have lost profits and earning ability; have absorbed some oil removal costs; have suffered property damage; or have experienced the tougher-to-gauge “loss of a natural resource.”

Documenting any claim is key, experts say.

“We’re saying don’t wait if you think you’ve got a claim,” said Larry Houff, an accountant with Carr, Riggs & Ingram, which has offices along the Gulf Coast. “If a restaurant is seeing a 30-percent decline in revenue, they should be filing a claim every month. They’ve got to stay alive.”

But, Houff added, “Businesses also should be able to show they’ve tried to mitigate their loss — by letting some employees go, cutting back on salaries, or taking some other cost-cutting steps.”

The cost of the Gulf spill is still unfolding. But it’s clear that its effects in Florida alone will soar into the billions of dollars as legal claims mount.

The state’s $60 billion tourism industry is staggering from at least a 20-percent decline, Visit Florida officials acknowledge. Along the Panhandle, the usually lucrative vacation season has evolved into a grim summer of oil, sharply reducing what for many beach-reliant businesses is the bulk of their annual revenue.

University of Central Florida economist Sean Snaith predicted earlier this summer that even a 10 percent decline in Florida tourism along the Gulf Coast would drain $2.2 billion from the state’s economy and cost 39,000 jobs. If tourism was cut in half, Snaith warned, the economic cost could top $10 billion and erase almost 200,000 jobs.

Property appraisers in Santa Rosa and Escambia counties have already sent a joint letter to Gov. Charlie Crist warning that homeowners and businesses are likely to endure a loss in value this year because of the spill — but face tax payments this fall based on assessments in place at the start of 2010.

The appraisers are urging lawmakers to approve a tax relief measure in a special session, similar to those enacted five times since 1985 following hurricanes, wildfires and tornadoes in Florida. The most recent, $1,500 property tax reimbursements handed out in 2007 to Central Florida residents whose houses were destroyed or heavily damaged by tornadoes.

But tax relief is far from certain. And against this volatile backdrop, many of those counseling businesses and residents say that if you’re experiencing a downturn, it’s wise to go ahead and file a claim at a BP office.

Such action doesn’t block you from filing a lawsuit later for an even larger claim. But getting a BP claim identification number and paperwork on record at least establishes that you were experiencing a loss.

It also secures a beach business, homeowner, golf course, resort or condominium association a place in what is certain to prove an ever-growing line of claimants.

“You ought to have a claim file,” said Dana Matthews, partner at Matthews & Hawkins, PA, a Destin law firm. “If you’re a fisherman, restaurant or hotel, you may be able to submit data showing you should get some money right away.

“But for plenty of people, the impact of this is going to be felt for a long, long time to come,” he said. “Your damage claim will probably increase. And you’ll probably wind up in court eventually.”

Because of the oil spill’s location, legal claims against BP will be considered multi-district litigation which, itself, is guided by a set of judicial rules and principles.

Most claims are expected to be directed to federal court, likely in Louisiana.

Class-action lawsuits have already been filed on behalf of Gulf shrimpers and the region’s fishing industry. But large plaintiffs’ law firms, mostly from the Gulf states, are already positioning other business claims, helped along by local attorneys.

Florida Panhandle lawsuits could eventually become part of this larger litigation.

“When you think of how far these claims may stretch, think of a concentric circle,” Matthews said. “It’s a ripple effect. It begins at the beach with a fisherman unable to fish, then to the restaurant that doesn’t have customers, to the hotel that has no guests, to well beyond that.”

William Hughes, a Tallahassee lawyer at Pennington Law Firm practicing commercial litigation, said those concentric circles currently stretch far and wide.

Courts will eventually begin focusing on claims and determining what is considered a legitimate “secondary” or even “tertiary” loss.

Until then, it’s possible that lawsuits against BP will accumulate and come from as far afield as the corner gas station seeing a decline in tourist traffic, or the Manhattan seafood restaurant that alleges lost business because Gulf oysters were struck from the menu.

“How far you can go in seeking damages or lost business opportunity will eventually be set by the courts,” Hughes said. “But right now, you can envision an almost unlimited range of claims.”

Like most, Hughes said Gulf businesses and residents shouldn’t feel they have to rush to court. Even Kenneth Feinberg, the administrator named by President Obama to head the

$20 billion BP compensation fund, cautions against eschewing the claims process and getting embroiled early in court.

“If you go to court, you’re rolling the dice,” Feinberg said. “Your lawyer will get 40 percent, you’ll wait five years, and there’s no guarantee you’ll succeed.”

Making a claim at a BP office, however, is a good first move, experts agree.

“My advice to a client is, ‘Stay alive long enough,’” Hughes said. “Get whatever subsidy money you can. Then keep good records and see what kind of impact this has on you and your industry.”

He also offered some simple advice that should be done before anything else.

“Check your insurance policy,” Hughes said. “A lot of base insurance policies will cover you for ‘business interruption’ damages. If you don’t have exceptions on your policy, you might have a simple insurance claim for whatever you’re losing.”

Houff, the accountant, said it’s vital that businesses take some basic steps ahead of what may be a long legal fight.

Along with filing a BP claim, a company can strengthen its hand by speaking to customers, asking them to put in writing the reasons why they have reduced their business.

Keep records of lost revenue or bookings and whatever moves you made in advance of the oil spill — from moving boats to other locations to spending time cleaning property fouled by tar balls or other damage. All are costs worth trying to recover.

Houff also cautioned that businesses should be prepared for the BP legal fight to eventually get ugly.

“BP is smiling now, on TV ads and handing out small-claims money,” Houff said. “But I think the frowns are going to come later when the big claims start rolling in.”

Navigating the Claims Process

BP has established a process to manage claims resulting from the Deepwater Horizon spill. It has stated that it will pay for bodily injury or illness, property damage and/or loss of income.

How to File a Claim with BP

• BP has established several ways to file a claim.
• File a claim online at bp.com/claims.
• Call the toll-free number at 1-800-440-0858 (TTY device: 800-572-3053).
• Visit a claims center in your area. Office hours are from 8 a.m. to 7 p.m. each day.
• File a claim by mail at ESIS, PO BOX 17160, Wilmington, Del. 19850. In order to avoid delays, BP recommends that the claimant call the toll-free number to obtain a claim number prior to sending in a claim by mail.

Claims Office Locations

• Pensacola (Escambia County)
• Gulf Breeze (Santa Rosa County)
• Ft. Walton Beach (Okaloosa County)
• Crawfordville (Wakulla County)
• Apalachicola (Franklin County)
• Port St. Joe (Gulf County)
• Panama City (Bay County)
• Santa Rosa Beach (Walton County)

Federal Disaster Assistance Information

Individuals and businesses looking for information on how to obtain federal assistance for dealing with the impacts of the current oil spill should visit DisasterAssistance.gov. Before applying for federal assistance, individuals should first make a claim with BP.

DisasterAssistance.gov includes information on the types of federal assistance that individuals and businesses can apply for such as nutrition programs, business disaster loans, temporary assistance for needy families and unemployment insurance.

U.S. Small Business Administration (SBA) Information The U.S. Small Business Administration may be able to provide Economic Injury Disaster Loans (EIDLs) — working capital loans to help small businesses, small agricultural cooperatives and most private, non-profit organizations of all sizes meet their ordinary and necessary financial obligations that cannot be met as a direct result of the disaster. — Information from restorethegulf.gov

Key Claims Statistics as of July 16, 2010

• 114,000 total claims
• $201 million paid
• 64,000 checks written since May 3 (10 weeks)
• 16,200 checks of $5,000 or more paid
• 131,000 calls received
• 6-second average call wait time
• 18,100 claims submitted online (as of July 12)
• 36 field offices, with translation capability at 9
• 1,500-member claims team
• 5-day average time from “claim to paid” for individuals who have received checks
• 9-day average time from “claim to paid” for commercial entities who have received checks
• More than 48,000 claims are awaiting documentation for a first payment
• More than 13,000 claims have “contact difficulties”

— Courtesy BP

BP IN FL As of July 16, 2010, Floridians filed 30,047 claims with BP. The company paid a total of $34,596,633 by that time.