BP oil spill claims climb ahead of appeal day

Sun Jul 7, 2013 7:06pm EDT
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LONDON (Reuters) - The number of claims filed against BP Plc's (BP.L: Quote) (BP.N: Quote) oil spill compensation fund has risen by 18 percent over the last six weeks to a total of 195,403, according to the claims website - even though payouts began almost a year ago and the fund will be accepting claims until next April.

The increase in claims that are set to contribute billions to BP's final spill bill has followed a period in which lawyers encouraged businesses and individuals to make claims for the 2010 disaster that killed 11 men in a rig explosion.

BP has complained repeatedly this year that the terms of a 2012 settlement reached on compensation with a class action set of claimants are being misinterpreted by Patrick Juneau, the claims administrator, allowing unaffected business to receive payouts.

Its appeals have so far been rejected, but its latest attempt to get the so-called business economic loss tranche of payouts stopped while an inquiry is launched will be heard by an appeals court later on Monday.

"Not only is the claims administrator's misinterpretation contrary to the plain language of the settlement agreement and the intent of the parties, but it has ignited a feeding frenzy among trial lawyers attempting to secure money for themselves and their clients that neither deserves," Geoff Morrell, BP's head of U.S. communications, said in a statement ahead of the appeal in New Orleans.

"We are asking the Fifth Circuit (court of appeals) to follow established legal principles of contract law and interpret the agreement as written and intended: paying only those claimants who suffered actual losses."


Much of BP's argument against the way Juneau is making the payouts hinges on an interpretation of accountancy terms that BP says is too loose.

Under the terms of the settlement, for a claimant, proof of a connection with impact from the spill itself is not necessary in most cases. Eligibility for a so-called business economic loss claim is instead triggered by the ability to show a lower revenue, higher expense, or both, during and/or after the oil spill, compared with other periods. Each side will be allotted 20 minutes to present its case.   Continued...

Activists protest in front of the Hale Boggs Federal Building on the first day of the trial over the Deepwater Horizon oil rig spill in New Orleans, Louisiana February 25, 2013. REUTERS/Jonathan Bachman