Monday, June 14, 2010
Proposal for Oil Spill Victim Compensation Fund
When the 9/11 Victim Compensation Fund was created it was widely considered a one time, unique institution responsive to the particular national tragedy (and the risk to the airline industry of catastrophic liability). It looks like the Obama administration is trying to negotiate the creation of a similar fund with BP to pay the victims of the oil spill.
It is still not clear whether the fund will happen, how much money will be available, and whether participants will have to give up their legal claims as the participants in the 9/11 Fund did. But some choice quotes from an AP report published today indicate that this is in the offing.
The NY Times also reports on the proposed fund. The Times reports that "Administration officials said that since last week, White House lawyers have been researching Mr. Obama’s legal authority to compel BP to set aside money for claims, based on the 1990 Oil Pollution Act." However, the President's authority is not clear. The desire for such a fund is driven by the concern about BP's 10+ billion dollar dividend. Joseph Grundfest (Stanford) is quoted in the Times: "“I’m not aware of any legal precedent that would give the government any authority that would preclude British Petroleum from paying dividends" especially because there isn't any evidence that BP lacks the funds to pay for the damages caused by the spill. The Times also quotes John Coffee (Columbia) stating that the courts may have the power to issue an injunction to prevent BP from paying the dividend under some circumstances.