Civil Procedure -- 2015

In re Deepwater Horizon   (5th Circuit)

Standards of impartiality for disqualification of claims administrator

The NAM and other business groups filed an amicus brief supporting a challenge to the impartiality of the administrator of claims arising from the Deepwater Horizon oil spill in the Gulf of Mexico. Administrators in cases like this are endowed with substantial power to make qualitative judgments about the validity of claims and quantitative judgments about the amount of damages properly to be awarded, and must avoid even the appearance of partiality. Biases or apparent biases of administrators must be disclosed in advance, or parties will avoid such alternative dispute resolution procedures and head for court, imposing greater costs on the court system and the public at large.

The case arose because it was discovered that the administrator appointed to handle the claims had served as an advocate for Louisiana on behalf of claimants against BP, and also participated in drafting pleadings against BP that led to the settlement that he presides over. Our brief called for the application of the same impartiality requirements for claims administrators as apply to judges, magistrates and judicially-appointed masters. This is particularly important where the administrator has significant discretion in exercising his authority, and he should disclose in advance any dealings that might create an impression of possible bias, erring on the side of disclosure. Without such disclosure, the parties should be able to move to disqualify the administrator.

No decision was reached on the merits, as the parties dismissed the appeal pursuant to a settlement agreement on March 6, 2015.

Related Documents:
NAM amicus brief  (December 26, 2014)


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