BP back in court over oil spill payments
BP HAS asked a US judge to direct what it called a “vast number” of businesses to repay hundreds of millions of dollars it says were wrongly awarded as compensation on claims stemming from the 2010 Gulf of Mexico oil spill.
In a Friday court filing, BP asked US District Judge Carl Barbier in New Orleans to require businesses to make restitution plus interest of excess payments, which it called “windfalls.” The company also requested an injunction to stop the businesses from spending these excess sums.
BP said letting the overpayments stand would create discrepancies that reward some businesses whose awards were made sooner. It also said “there is no public interest in permitting dissipation of assets to which claimants had no right.”
Friday’s request escalates BP’s legal battle over how to interpret its 2012 settlement to resolve claims by businesses who said they suffered economic losses because of the spill.
BP has long said the businesses’ lawyers and claims administrator Patrick Juneau have misinterpreted the settlement, allowing recoveries without proof that the spill caused losses. The London-based oil company has said the uncapped settlement could cost $9.2bn, higher than its original $7.8bn estimate, and that this amount could increase.
On June 9, the US Supreme Court said that BP must continue to pay oil spill claims as it pursues legal challenges to the payouts. Friday’s filing came six months after Judge Barbier directed Mr Juneau to change his policy in reviewing claims applications, and ensure that claimants be able to “match” revenues with costs for the purpose of calculating financial losses.
BP said Mr Juneau’s new policy, which won court approval on May 5, would lead to “dramatically different calculations of lost profits,” and justifies recouping earlier, inflated awards. To illustrate the potential changes, BP said a seller of animal skins would have under the new policy been paid $14m less than it was awarded, while a construction firm located hundreds of miles from the Gulf would have been paid $8.4m less.
Mr Juneau’s earlier interpretation “resulted in claimants receiving awards well in excess of what they are entitled to under the settlement agreement — in some cases by millions of dollars — or awards that weren’t warranted at all,” BP spokesman Geoff Morrell said.
“Letting these erroneous awards stand uncorrected would violate basic principles of fairness and equity.”
Steve Herman and Jim Roy, the lead lawyers for business claimants, said: “This is just another attempt by BP to back out of the commitment it made to the Gulf.”
A spokesman for Mr Juneau did not immediately respond to a request for comment over the claims.
The April 20, 2010 explosion of the Deepwater Horizon drilling rig and rupture of BP’s Macondo oil well led to 11 deaths and the largest US offshore oil spill. BP has said it has taken $42.7bn of pretax charges for the oil spill.