Oil Pollution Act May Provide an Extra Source of Compensation to Those Affected by Gulf Coast Oil Spill

In the aftermath of the explosion of the Deepwater Horizon and the disastrous oil spill that now encroaches on Louisiana’s coastline, many individuals and business will be looking for a way to handle the massive financial burden associated with clean up and recovery. Luckily, the law provides a way for them to collect some damages.

The Oil Pollution Act

In 1989 the Exxon Valdez spilled over 11 million gallons of oil into Prince William Sound in Alaska. At the time, the U.S. did not have adequate funds to respond to the spill and only very narrow compensable damages could be recovered. The Oil Pollution Act (OPA) was passed by Congress in 1990 (33 U.S.C. 2701-2761) to address these shortcomings. The OPA created a comprehensive regime to prevent, respond to, and compensate for vessel and facility caused oil pollution. The law also provided for federal oversight of maritime oil transportation through increased environmental safeguards.

Title I of the OPA broadened the scope of damages for which polluters are liable and authorized up to $1 billion for the Oil Spill Liability Trust Fund (OSLTF). The OSTLF can be used to pay for oil removal and damages that are left uncompensated after claims are made against the parties responsible for the spill (the limit of the fund was raised to $2.7 billion with the passage of the Energy Policy Act of 2005) and is funded by an oil tax. The U.S. Coast Guard administers the OSLTF through the National Pollution Funds Center (NPFC).
It is interesting to note that the OSTLF was actually created four years before the passage of the OPA in 1986. However, Congress did not authorize the use of the money in the fund or the collection of revenue necessary to maintain the OSTLF until the OPA was signed into law.

As mentioned above, under the OPA, the OSTLF can be used to pay claims for uncompensated removal cost and damages after an oil spill. In the current situation, British Petroleum (BP was leasing the Deepwater Horizon when the explosion occurred and has been deemed the responsible party) is currently accepting claims. However, if any party is not satisfied with the resolution of their claim by BP, they may make a claim under the OPA and submit a claim to the NPFC. Several different types of claims are recoverable, many of which may apply to individuals or businesses whose lives have been negatively affected.

The OSTLF can be used to make claims under a variety of parameters:
Compensate the public for the lost use of the affected natural resources.
This could entail compensation for the lost use of public lands that have been contaminated by the spill.

Pay the cost to remove, minimize, mitigate, or clean up an oil spill.
This means that if BP is unable to fully clean up the spill, the federal government has funds available to use to ensure areas are returned to pre-spill condition.
Pay the cost of economic loss that resulted from the destruction of real or personal property (although not personal injury).
Real property includes real estate and personal property includes any other property that may have been damaged in the spill.

Pay for injury or economic loss that resulted from damage to a boat.
If you own a boat that was in an affected area and is now damaged, you may be able to recover damages to repair or replace your boat.

Pay damages equal to the loss of profits or impairment of earning capacity due to the injury, destruction, or loss of property or natural resources.
If you own a business in an affected area and the business was forced to close temporarily or permanently you may be able to recover damages for the profits that would have been earned if the oil spill did not occur.

Pay damages to anyone who has lost profits or income, regardless of whether or not they owned the damaged property.
This may apply to someone that operates a business in an affected area but does not own property (maybe the business property is leased or the business does not involve the use of property). Owning damaged property is not a prerequisite for recovering damages.

It is important for potential clients to make a claim as soon as they can so that the legal process can begin. By hiring an attorney that is advanced in matters relating to liability for industrial accidents, an affected party may have their best chance in court to get the justice they deserve.

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