BP loses appeal over Gulf of Mexico payments

Published at 11:41AM - 04/03/14

A divided US court has rejected BP Plc’s attempt to block payments to business relating to the Deepwater Horizon oil spill in the Gulf of Mexico in 2010.  The court action centred on a claim made by BP that many of the claims brought to its compensation fund were fictitious.  Many companies that have lodged successful claims have actually been located hundreds of miles away from the spill, some of which have even seen a growth in business since the spill.

It has been reported that in one example alone $9.7m (£5.8), was given to construction company 200 miles from the coast of Alabama, which had its most successful year in 2010.

The 5th Court of Appeals in New Orleans rejected the claim on a vote of 2-1, upholding a ruling made on 24th December authorizing payments to businesses.

“The settlement agreement does not require a claimant to submit evidence that the claim arose as a result of the oil spill,” Circuit Judge Leslie Southwick wrote for the majority.

Later in stark contrast Judge Edith Brown Clement dissented, saying the decision wrongly helps claimants whose losses had “absolutely nothing to do with Deepwater Horizon or BP’s conduct.”

In a press release, BP has stated, “BP believes that today’s decision will improperly allow for the payment of losses with no connection to the spill. BP further believes that unless this problem is fully corrected, the settlement cannot be upheld under the law.”  BP has also said that a rehearing has already been sought.

No comment has been by Patrick Juneau, the claims administrator where much of the criticism lays.

BP had originally set a compensation fund of $7.8 billion (£4.7b), however this has since spiralled and estimates have now put this figure upwards of $9.2 billion (£5.5b).

Last updated on 03:25PM - 11/07/14