The AP reports that while speaking in Pensacola this week, BP Oil Spill Fund Administrator Kenneth Feinberg urged people to find out what BP will pay them before filing a lawsuit:
Feinberg also said there’s no reason for individuals affected by the massive Gulf of Mexico spill to file lawsuits – at least not yet.
Feinberg urged claimants to see how much he’d be able to pay them for before suing.
A separate article in the New York Times reports that Feinberg knows that he is facing skeptics:
Mr. Feinberg knew he was facing many skeptics — and cynics — who no doubt wondered if they could get more money from the oil company, not to mention satisfaction, in the courts. He acknowledged the doubters, noting that they were being asked to sign up for “a program that’s never been tried, never been tested and that they view with some skepticism.”
I’m a cynic myself, but at this time I agree with Feinberg. People who hire a lawyer on a contingency fee contract will have to collect much more in litigation just to break even with BP’s non-lawsuit offer.
My estimate is that you need to recover approximately 50% more in a lawsuit to match BP’s original offer. This figure is derived by applying a 30–40% contingency fee and adding another 10–20% in case expenses that ultimately are subtracted from the client’s recovery.
And people don’t have to sign a contingency agreement with a lawyer to get legal advice. Most lawyers will work for an hourly rate. People could hire a couple of hours of a lawyer’s time to review BP’s offer and proposed settlement papers and discuss the issues involved in deciding whether the offer is fair. I realize that everyone can’t afford even a few hundred dollars to pay a lawyer, but many people can.
Don’t get me wrong. I expect that many people will have to file lawsuits. But not everyone. If possible, people should at least attempt to resolve their own claims before signing away a big chunk of their recovery.