Legal Ethics

Feinberg Can’t Claim Neutrality or Tell Claimants They Don’t Need Lawyers, Judge Rules

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Ken Feinberg can’t refer to himself as neutral and independent of BP as he oversees the company’s $20 billion fund to compensate victims of the Gulf oil spill, a federal judge has ruled.

Nor can he tell claimants they don’t need lawyers, U.S. District Judge Carl Barbier of New Orleans said in an order (PDF) issued on Wednesday. The New York Times and Reuters have stories.

Barbier said Feinberg is not a true third-party neutral such as a mediator, arbitrator or court-appointed special master. Instead, he wrote, BP “has created a hybrid entity” to oversee oil spill claims. While Feinberg has independence in the evaluation and payment of individual claims, he was nonetheless appointed by BP and is paid a flat monthly fee by the company.

Feinberg’s hybrid role “has led to confusion and misunderstanding by claimants, especially those who are unrepresented by their own counsel,” said Barbier, who is overseeing Gulf oil spill litigation. Lawyers suing BP had asked Barbier to issue the order.

A claim of “neutrality and independence is misleading to putative class members and is a direct threat to this ongoing litigation,” Barbier wrote, “as claimants must sign a full release against all potential defendants before obtaining final payments.”

Related coverage:

ABA Journal: “Master of Disasters: Is Ken Feinberg Changing the Course of Mass Tort Resolution?” “Feinberg Firm Gets a Reasonable $850K a Month to Oversee $20B Oil Spill Fund, Report Says” “Feinberg Rethinks BP Claims Process, Now Sees Valuable Role for Lawyers”

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