View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
May 19, 2014

US court rejects BP’s appeal to rehear over Gulf of Mexico oil spill ruling

UK-based BP has received another blow in the ongoing court battle over the 2010 Gulf of Mexico oil spill, with a federal appeals court refusing to reconsider its previous ruling that businesses do not have to prove they were directly harmed by an oil spill to collect settlement payments.

UK-based BP has received another blow in the ongoing court battle over the 2010 Gulf of Mexico oil spill, with a federal appeals court refusing to reconsider its previous ruling that businesses do not have to prove they were directly harmed by an oil spill to collect settlement payments.

The Associated Press reported that the order by New Orleans’ fifth US circuit court of appeals could be a move towards resumption of a claims process that was suspended after a district court ruling in December 2013.

The company has requested the court rehears the case after a three-judge panel’s ruling in March 2014.

BP has been trying to limit payments it has to make to businesses, arguing that the decision would allow businesses to recover fictitious losses.

In Monday’s order, Judge Leslie Southwick said that a 2012 policy statement, given by the court-appointed claims administrator and developed with input and assent from BP, spelled out the criteria for business claims.

"Our courts’ decisions would allow payments to ‘victims’ such as a wireless phone company store that burned down and an RV (recreational vehicle) park owner that was foreclosed on before the spill."

Southwick said: "Instead of direct evidence of a causal connection between the Deepwater Horizon disaster and the claimant’s business losses, the exhibit described four geographic zones, several types of businesses, formulae for presenting economic losses and various presumptions regarding causation that apply to specific combinations of those criteria."

Judge Edith Brown Clement opposed by saying: "Our courts’ decisions would allow payments to ‘victims’ such as a wireless phone company store that burned down and an RV (recreational vehicle) park owner that was foreclosed on before the spill."

Monday’s ruling consolidated multiple appeals in the case and appears to settle what BP said were conflicts between two earlier panel decisions related to the settlement.

It is the latest development in a complicated legal back-and-forth, deciding to whom BP owes money following the largest oil spill in US history.

BP started to challenge the business payouts where it no longer could give a reliable estimate for how much the deal will cost.

The company had initially estimated that it would pay roughly $7.8bn to resolve the claims, but it has now paid more than $12bn in claims to people, businesses and government entities.

A trial scheduled for January 2015 in New Orleans is part of the litigation that will decide how much the company owes in federal Clean Water Act penalties.

BP spokesman Geoff Morrell said: "BP is disappointed that the full fifth circuit will not be considering the divided panel decisions relating to the compensation of claims for losses that have no apparent connection to the spill."

Energy link

Related Companies

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Friday. The industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Offshore Technology