Since the explosion on the Deepwater Horizon oil rig, law firms seeking clients for litigation related to the oil spill have been advertising their services throughout Florida and the Gulf region.
Although you may be entitled to compensation from BP and other responsible parties for certain losses, you should exercise caution when making legal decisions, to ensure your initial actions do not affect future legal rights. You do not need to be in a hurry, because by law you have at least three years to file a claim. Taking time to weigh options carefully before acting will not result in lost legal rights. Acting hastily could limit your ability to secure temporary financial assistance.
Things every Florida resident should know
Anyone who has suffered damages to property or business due to the oil spill may seek compensation directly from BP
You may do this without the assistance of a lawyer by calling BP’s claims line at 1-800-440-0858, or by visiting a local BP claims office in your area, if available. Florida residents may apply at the online claims submission page from BP’s Florida Gulf Response Web site at www.floridagulfresponse.com.
UPDATE 06-24-10: It is estimated that by late July, a new claims process will be in place due to transfer of claims processing from BP to an independent, third-party contractor. This change may lead to more consistent collection of claims information as established by federal law.
Your insurance policy may cover some or all of the damages
Some homeowners, business interruption, or umbrella insurance policies may cover some or all of your damages. See your policy documents for information for specifics of whether the oil spill damage is covered and how to make an insurance claim.
If some or all of the oil spill damage is covered by insurance, any insurance payment must be reported as any part of a claim to BP or the National Pollution Funds Center. This is because the Oil Pollution Funds Act specifically preserves “subrogation” for insurance companies (33 U.S.C. section 2715). Subrogation means that if an insurance company pays a party’s damages from the oil spill (or part of them) under the party’s insurance coverage, the insurance company takes over that party’s right to claim that same money from BP (or the National Pollution Funds Center). To avoid confusion or potential problems down the road, claimants need to keep very good records of what payments are coming from what sources for which damages. (ADDED 06-10-10)
Participating in any lawsuit against BP, such as a class-action suit, will prevent you from receiving immediate or short-term compensation.
Some claimants are already receiving short-term compensation from BP, but BP is unlikely to consider your claim if you are a part of a lawsuit against it. It should also be noted that accepting payment now does not prevent you from receiving temporary or short-term compensation from BP in the future.
UPDATE 06-24-10: The policy governing the BP claims process is established by federal law, and federal law does not allow damage payments to proceed if you are part of a pending lawsuit for those same damages.
Claims may include reasonable costs incurred to assess your damages.
Under federal law, the reasonable costs you incur when assessing your damages may be included as part of your damage claim. However, expenses incurred in claim preparation and filing, such as attorney’s fees or other administrative costs, may not. (ADDED 06-24-10)
If you use an attorney when preparing your claim, read the retainer contract carefully before you sign it.
Simply retaining an attorney to represent you in claim preparation does not prevent you from receiving short-term payments. Some attorney/client contracts, however, may give the attorney the right to decide when you become part of a lawsuit. This would end your ability to seek any short-term damage payments. Other contracts require that the client pay his or her portion of any costs incurred by the law firm should the client seek to end the representation. Ask your attorney to explain any of the contract’s provisions you may not understand. (ADDED 06-24-10)
There is a federal backup to the BP claims process.
BP has 90 days to respond to your claim, but if it fails to process your claim in that time or denies it, you have a right to seek payment from the Oil Spill Liability Trust Fund. Claims must be submitted to the Coast Guard’s National Pollution Funds Center (NPFC).
You have three years from the date of the incident to file a claim with the federal Trust Fund. If you accept money, you cannot later file a lawsuit against any party to recover costs or damages which were the subject of the compensated claim. If payment is received from another source, such as insurance, you must reimburse the Fund. Currently there is a $1-billion cap on expenditures from the trust fund per incident. The Funds Center processes claims in the order they are received.
If you choose to sue BP instead of using BP’s claims process, Florida law gives you four years, not just three, from the date of the harm to file suit.
Use this time to compile your records, document losses, and learn more about your situation and your legal rights. Be certain to preserve all possible evidence of your damages, including photos, financial records, cancellations, or any other evidence of loss of work or income as well as activities you take to minimize your losses.
There are rules that govern how lawyers may solicit you for your business.
Generally, a lawyer, or lawyer’s representative, may not contact you to solicit employment in person or by telephone, unless you have previously contacted the law firm.
The rules vary, however, for written communication. Attorneys may send you an unsolicited email or letter if two conditions are met. First, the material must disclose one or more actual office locations of the lawyer who will perform the services advertised. Second, it must clearly be marked as an advertisement. For an email, this means the subject line must begin “legal advertisement.” Printed material must bear the word “advertisement” in red ink.
Attorneys may advertise on television and radio, but only attorneys licensed in Florida may file lawsuits in Florida.
If you believe you have been improperly solicited by a lawyer, you should report it immediately by contacting the Attorney/Consumer Assistance Program (ACAP) at 1-866-352-0707.
Once you retain a lawyer, BP is not permitted to contact you directly.
BP is required to only communicate with your attorney unless your attorney, in writing, authorizes BP to communicate directly with you.
UPDATE 06-24-10: A form for this purpose is available at http://www.bp.com/claims.
Carefully read all accompanying documents before you accept payment from BP for a damage claim.
If you have applied for immediate damages from BP, you need not turn down any offer of money, but if the forms you sign when you receive the money contain language releasing BP from any further liability, this may prevent you from seeking future compensation.
If you are asked to sign anything you do not fully and clearly understand, you should consult your own attorney. Your attorney should review all documents prior to signing to ensure you are not giving up future rights in return for what you view as only partial payment for all the claims you may eventually have.
Some attorneys advise writing “with reservations” just above where you countersign the check, especially if you accept a check without signing any other papers and you do not view the payment as full payment for all your damages. It could help in your claim should BP assert that you accepted the check as complete payment. You should also keep a copy of both sides of the signed check for your records.
If you need legal advice, seek attorney referrals from trusted individuals.
Optionally, the Florida Bar Lawyer Referral Service offers referral for a slight charge. That number is 1-800-342-8011. You can also check the Florida Bar Association’s attorney online directory, http://www.floridabar.org. Select “Public Information” on the left tool bar and then choose “Find a Lawyer”.
Don’t be influenced by stories you hear about the Exxon Valdez oil spill.
You may hear a lot about the $2.5 billion in damages a jury awarded to injured parties following the Exxon Valdez spill. That verdict, however, did not stand, for reasons that extend beyond the scope of this advisory, and was reduced to $507.5 million. While this may sound large, Exxon did not begin writing compensation checks until November 2009, some 20 years after the original spill. Some of the plaintiffs received less than $100 in punitive damages.
The key point is that entering into a lawsuit would almost certainly prevent you from receiving short-term compensation for your actual damages. Any award you might receive from a lawsuit would likely not come for many years, and might not be significantly greater than what you could receive through the established claims process.
The Florida Sea Grant College Program is providing this non-advocacy legal research
as a public service to Sea Grant constituents.
ADDED 06-24-10: This information is not intended to, nor does it, create an attorney-client relationship.
If you need specific legal advice, please contact your attorney.