Calamities and Kenneth Feinberg have a way of finding each other.

As soon as the Deepwater Horizon drilling rig sank and triggered a huge oil spill in the Gulf of Mexico in April, Mr. Feinberg started mulling how an avalanche of claims by economic victims could be handled. Less than two weeks ago, BP BP +0.21% BP PLC ADS U.S.: NYSE $47.69 +0.10 +0.21% March 14, 2014 4:00 pm Volume (Delayed 15m) : 3.77M AFTER HOURS $47.79 +0.10 +0.21% March 14, 2014 7:38 pm Volume (Delayed 15m): 127,459 P/E Ratio 6.59 Market Cap $146.51 Billion Dividend Yield 4.78% Rev. per Employee $4,505,790 03/13/14 BP Reaches Agreement With U.S. 03/07/14 Corporate Economists Are Hot A... 02/24/14 New Bet on China's Yuan: Down More quote details and news » PLC called to offer him a job doing just that. Last week, BP and President Barack Obama jointly chose him as administrator of an unprecedented $20 billion compensation fund.

The Washington lawyer and arbitration guru is now racing to speed up the system that BP initially put in place to compensate tens of thousands of Gulf residents and businesses for their financial injuries. It's a task he predicts will outstrip in complexity all the other victims' funds he has run, from the Agent Orange liability litigation in the 1980s to the $7 billion for victims of the September 2001 terror attacks.

Kenneth Feinberg Reuters

From the Archives

Transcript: "Why them but not them? Why the victims of 9/11 but not the victims of Oklahoma City? Why the victims of 9/11 at the World Trade Center but not the victims at the World Trade Center of the first terrorist attacks in 1993?" More from Mr. Feinberg on victim compensation

What makes this case all the harder to handle is that it remains an unfolding disaster. "Until the oil stops, this is an ongoing tort. We just can't say what the final size of claims will be," Mr. Feinberg said in an interview. "The sheer scope of this is something we haven't seen before."

Two days after BP and the White House agreed on June 16 to set up an independent claims fund, Mr. Feinberg flew to the region, first to Mississippi and then Louisiana. Mr. Feinberg met Monday with BP executives in Houston to work out details for taking over the claims process. He is set to travel next to Alabama and Florida.

The fund he is set to administer has a number of oddities. It was created as a voluntary compact between the U.S. government and BP, but without any act of Congress, executive order or other legal anchor. Mr. Feinberg will have complete latitude to determine the fund's operations, including all key decisions as to who gets money and in what amounts.

Since his appointment, Mr. Feinberg has said repeatedly that he would neither take orders from the White House nor BP. But he said that Mr. Obama did give him one instruction: to get payments out quickly.

After meeting with Mississippi Gov. Haley Barbour on Friday, the 64-year-old Mr. Feinberg warned of the high potential for fraudulent claims in the same breath as he urged anyone who thinks they may be eligible to step forward. Getting people to apply in the first place is his first big hurdle.

"You'd be amazed how many people don't come forward," he said. "They procrastinate, they worry, they doubt they will qualify, they don't trust the process, whatever."

BP has faced heavy criticism for lapses leading up to the disaster and for failing to prepare for a spill of this size. But Mr. Feinberg praised the company for its work in getting a claims process running swiftly. For at least another month, Mr. Feinberg will be advising BP on ways to speed up payments and make the process more transparent. He said he hoped to assume all responsibilities by August.



The son of a tire salesman and a bookkeeper from Brockton, Mass., Mr. Feinberg makes his case in the heavy twang of south Boston. A former chief of staff to the late Sen. Ted Kennedy, he went on to become one of the country's most prominent arbitrators. After a rough start, he earned wide respect for how he handled the survivors and families of those killed on 9/11. The Treasury Department appointed him last year to monitor executive pay at companies that had received federal bailout money during the financial crisis.

"Ken is accustomed to handling these sort of issues without emotion," said former Attorney General John Ashcroft, who appointed Mr. Feinberg to run the 9/11 fund. "He was very good at distinguishing the deserving from the undeserving."

Doing the same along the Gulf Coast could be his biggest challenge. Can a motel 100 miles from the coast file for diminished revenues? What about a restaurant in Atlanta now having to pay more for shrimp?

And what about a New Orleans strip bar called the Mimosa Dancing Girls, which has put in a claim for a slump in sales? Asked about that one Monday on "Good Morning America," Mr. Feinberg said he was "very dubious about that claim," but didn't want to prejudge it.

As a rule, Mr. Feinberg said, he will turn to state law for guidance on which types of claims to honor and which to dismiss.



Write to Neil King Jr at