BP loses compensation claims battle

Published: Monday 8th December 2014 by The News Editor

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BP has lost a US Supreme Court battle over Gulf oil spill compensation claims, many of which it said had no connection to the disaster.

The oil giant argued that a multi-billion dollar settlement it reached to reimburse businesses and residents had been misinterpreted by lower courts and left it having to pay claimants “whose losses are not traceable to the spill”.

But senior judges left the 2012 settlement in place. BP currently estimates its pay-outs under the arrangement at around 9.7 billion US dollars (£6.2 billion) though this does not include claims yet to be received.

The blow-out of the Deepwater Horizon rig in 2010 killed 11 workers and spilled millions of barrels of oil into the Gulf of Mexico, damaging fishing and tourism as well as marine and wildlife habitats.

But BP has aggressively challenged the way claims are being handled by a court-appointed administrator and judge, and said it had won a partial victory in an earlier court ruling.

Following today’s judgment, spokesman Geoff Morrell said : “We nevertheless remain concerned that the programme has made awards to claimants that suffered no injury from the spill – and that the lawyers for these claimants have unjustly profited as a result.

“On behalf of all our stakeholders, we will therefore continue to advocate for the investigation of suspicious or implausible claims and to fight fraud where it is uncovered.

“In doing so, we hope to prevent further exploitation of our commitment to compensating all those legitimately harmed by the spill.”

Chief executive Bob Dudley last year vowed to dig in for a long-haul legal battle over “absurd” claims, saying: “No company would agree to a settlement that pays businesses that suffered no losses.”

Today’s ruling is BP’s latest legal setback over the disaster.

In September, a judge in a separate case ruled that the oil giant was “grossly negligent” in the run-up to the incident, paving the way for billions of civil penalties under the Clean Water Act. BP said it would appeal against that decision.

Its latest quarterly update in October put the total running cost for the disaster, including compensation and fines, at 43 billion US dollars (£27.5 billion).

Published: Monday 8th December 2014 by The News Editor

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