Good Summary of Legal Forum

CPA Bob Holmes attended the Pensacola Chamber’s forum on the legal issues involving the BP oil disaster. Here are some notes that he took at the meeting:

At the Town Hall meeting a PJC this morning there were several things I learned.

The laws governing liabilities in this situation include US Maritime and Admiralty law, federal Oil Protection Act and the Florida Pollution Act. Differing rules in all.

There are three options.

Per OPA, all claims must me made to the “Responsible Party” (RP). At this juncture, BP has acknowledged they are the responsible party. That does not preclude anyone from making claims against others like the owner of the Deepwater Horizon or the manufacturer of the blowout preventer. But under OPA, claims must be made first to a “responsible party”.

There is a process for making a claim with the responsible party. Documentation is required. That documentation can vary depending on the nature of the claim and the type of business making the claim.

Generally, income tax returns and profit and loss statements are required. Also helpful are cancellation records, both from before and after the event. It is important to document that the loss of business was due directly to the oil spill. Also, needed is a narrative of what operating results were anticipated for periods following the event.

Generally, there are four categories of claims: Lost profits; additional expenses of prevention, clean up, costs associated with asserting claims, additional advertising or discounts incurred to mitigate downturn in business; diminished value of property or business; expenses to mitigate damages.

Claims must be for a sum certain, a total amount. In most cases, the total claim may take years to ascertain. If a claim is filed and the RP and only a partial payment is made, the claimant is required to submit an additional modified claim. This may entail constant and ongoing claim filing, perhaps monthly.

The statute of limitations on filing a claim is generally three years from the time of the date of injury, six years for oil removal.

If your claim is denied by the RP, you can also see restitution from the Oil Spill Liability Trust Fund that is administered by the US Coast Guard.

If a claim cannot be settled, then and only then can you seek restitution in the courts. However, you can seek restitution under any of the various statutes, federal or state.

The $20 billion dollar fund was initially set up to reimburse government agencies! Later that was changed to include ALL claims. It is suggested that cleanup costs have already exceeded $2.5 billion.

The process for handling the claims from the fund are still being determined. However, if a claim is denied, then there will be a review officer/office, and subsequently, a three judge appeal panel.

It was convey at the meeting that BP has already be in contact with the best bankruptcy attorneys in the country.

Recommendation: Do not submit you claim absent have competent legal counsel review your paperwork. Rules regarding the proper filing of a claim could be critical.

Do not sign anything without consulting competent legal counsel.

This email does not constitute legal advise, but is merely to convey to you information made available to the public by five local attorneys.

The program is to be aired on July 1 on WSRE TV for your viewing enjoyment.

Bob Holmes
Holmes & Company, P.A.
Certified Public Accountants
99 S. Alcaniz Street, Suite A
Pensacola, Florida 32502