Lawyers For Gulf Spill Victims Say BP Trying To Renege On Payments

Lawyers for claimants in the 2010 Gulf of Mexico oil spill are dismissing BP’s effort to force the repayment of hundreds of millions of dollars in compensation as merely one more legal straw in its effort to sidestep responsibility for the disaster.

“This is just another attempt by BP to back out of the commitment it made to the Gulf,” Jim Roy and Steve Herman said in a written statement. “BP itself has already told the Supreme Court that it ‘will have no practical way of recovering’ the money it paid.”

The lawyers said the effort to negate the payments flies in the face of what the company already has agreed to in U.S. District Court in New Orleans. “Every claim that was paid was done so according to an independent trust agreement that BP co-authored and agreed to.”

Nevertheless, on June 27, lawyers for BP filed a request with U.S. District Judge Carl Barbier urging him to order a “vast number” of businesses to return compensation payments amounting to hundreds of millions of dollars that the London-based oil company says already have been awarded in error because of a misinterpretation of the compensation criteria.

BP said it wants restitution from claimants who were paid before May, when Barbier’s court established new criteria for the payments. The company said many businesses that received compensation before then “were unjustly enriched.”

BP is demanding interest as well as principal from these businesses, and wants Barbier to prevent them from spending any money they’ve already received. “There is no public interest in permitting dissipation of assets to which claimants had no right,” it argued in the filing.

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The oil company said an open-ended settlement regime would be unfair to BP, costing it $9.2 billion, more than $1 billion more than the original estimate of $7.8 billion, and that the amount could grow even more if Barbier doesn’t act.

This is not BP’s first effort to rein in the cost of compensation, but on June 9, the U.S. Supreme Court told the oil company that even as it fights the claims, it still must continue to pay compensation as damages to individual businesses are certified by the claims administrator in the case, Patrick Juneau.

“BP has consistently and publicly maintained that it would be entitled to recover overpayments once the misinterpretation was corrected,” BP spokesman Geoff Morrell said in an emailed statement. He said such improper payments would be unfair to other claimants whose awards were calculated more accurately after the criteria were revised.

BP’s Deepwater Horizon drilling rig at the company’s Macondo well off the coast of Louisiana exploded in April 2010. The blast killed 11 workers on the rig and gushed crude oil into the Gulf of Mexico for nearly three months.

By Andy Tully of Oilprice.com