June 17, 2010

Why I'm against the BP shakedown

And it's absolutely a shakedown.

As our three readers know, I work in the plaintiff's side personal injury field.  Thus, I have a slightly different take on this.  Bear that bias in mind while reading the below as well. 

I want to know how the hell Obama decided that he knows that $20 billion is enough for the damages.  I haven't read the details of this plan yet, but I am utterly sure that participation in the fund will require the waiver of any rights to sue BP.  I'm also sure there will be enormous pressure brought to bear on those affected to make the claim through this fund, both due to sheer economic necessity and other forms of persuasion. 

So what does that mean?  That means that some bureaucrat is going to get to decide how much your fishing business is worth, not a jury of your peers.  Of course I'm against that.  Yeah, the jury system may suck but does anyone, anyone at all, trust that this fund will be administered fairly and transparently?  Bueller?  Bueller?  What happens when the fund starts to reach the cap?  Will BP be on the hook for more money or will the claimants be told too bad so sad?  What methodology will be used for valuation?  Will there be any type of appeal process if you don't like the number that is placed on your claim?  Will that appeal process be intra-agency only or will there be any type of court oversight of this process? 

The closest analogy I can come up with is the 9/11 Fund.  The Firm did some pro bono work on those claims and I can tell you from personal experience that it was a hugely complicated and not even remotely equitable process.  At least the 9/11 fund had some colorable claim of necessity, since it involved questions of suits against sovereign entities *koff*  Saudi *koff* that made the existence of an alternate method of recovery reasonable.  But this?  There are ample civil and criminal means of recovery in place right now.

For those who take this as a defense of BP, it's not.  My point is that BP is getting off CHEAP.  Not only is this hugely problematic from a separation of powers point of view, it's also hugely problematic from a plaintiff's perspective.  I anticipate that the next move will be some lawyer attempting to certify a class of all potential claimants to the fund, that class being granted and then the creation of an all but impossible opt out procedure.  So BP was presented with a deal it could not turn down.  Why should it?  If I were BP's counsel I would tell BP to jump on this with both feet and then make sure the actual implementation screwed over as many claimants as possible.

From my perspective, Obama just created precedent to eliminate the jury trial in any type of mass disaster.  That's terrifying. 

I also want to know how this interplays with bankruptcy law.  I know jack about the current US bankruptcy system and less than that about foreign bankruptcy.  Are these funds going to be considered exempt from secured creditors if BP goes down?  If so, then, once again, the entire concept of secured creditors goes out the window.  See re:  Chrysler. 

So, yes, I have tremendous problems with this.  So should everyone else.

Posted by: alexthechick at 12:02 PM | Comments (12) | Add Comment
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