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Charles Kennedy

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Claimants Win Legal Battle with BP over Oil Spill

Claimants Win Legal Battle with BP over Oil Spill

In another major legal setback for British-based oil giant BP, a US court has ruled that businesses claiming losses due to the 2010 Gulf of Mexico oil spill will not have to put any further effort into tracing these losses to the disaster.  

The US 5th Circuit Court of Appeals this week ordered BP to restart payments from its $9.2 billion compensation fund, rejecting the company’s bid to block business from recovering money over the oil spill even if they failed to explicitly trace their economic losses to the disaster.

BP was attempting to limit payments to claimants as a result of the explosion of the Deepwater Horizon drilling rig on 20 April 2010, and the rupture at the Macondo oil well which led to the worst oil spill disaster in US history and resulted in the death of 11 people.

Now considering whether to appeal the latest ruling, BP said in a statement:

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"BP disagrees with today's decision by the U.S. Court of Appeals for the Fifth Circuit denying the company's request for a permanent injunction preventing certain payments under the Economic and Property Damages Settlement it reached in 2012. BP had asked the Court to prevent payments to business economic loss (BEL) claimants whose alleged injuries are not traceable to the Deepwater Horizon accident and oil spill. BP believes that such BEL claimants are not proper class members under the terms of the settlement and is considering its appellate options."

Attorneys for the plaintiffs released a statement saying, "today's ruling makes clear that BP can't rewrite the deal it agreed to."

Two years ago, BP predicted it would end up paying around $7.8 billion in a compensation deal, but claims kept pouring in—many of them illegitimate, according to BP.

The interpretation of the settlement with oil spill victims has been varying; specifically because the agreement did not stipulate that claimants must prove that losses were related to the spill and set no cap on compensation.

BP is now concerned that it could see countless billions added to its settlement bill, which has already cost $42 billion.

By Charles Kennedy of Oilprice.com




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