A few months back, one of our blogs discussed how a US judge blocked BP’s attempt to suspend settlement payments.
On July 26th, the judge refused BP’s request to temporarily suspend the multi-billion dollar compensation program currently paying out claims to Gulf oil spill victims. US district judge Carl Barbier failed to recognize any legitimate evidence of widespread fraud among claimants and did not feel that a suspension of the program was justified. Barbier’s December 2012 payout ruling was upheld.
BP Objects to Some Gulf Business Claims
In the early summer months, BP had been the focus of news stories resulting from an internal legal dispute between corporate officials and its compensation plan administrator, Patrick Juneau. BP has alleged gross mismanagement of the compensation process with allegations that Juneau “is paying out “fictitious” and “absurd” claims due to a misinterpretation of the settlement.
BP’s chief objection was not over payments made to individuals, but claims paid to some businesses. Awards are based on a comparison of revenues and expenses of before and after the spill. BP says a “policy decision” that claims administrator Patrick Juneau announced this past January has allowed businesses to manipulate those figures in a way that leads to errors in calculating their actual lost profits. Simply put, BP claims it’s looking to protect itself from paying out falsely inflated or fraudulent claims for lost business profits.
The total dollar amount of claims will remain unknown for some time, as the deadline to file a new claim does not expire until April of 2014. As of November 1st, 2013, tens of thousands of business claimants have received settlement offers totaling at least $4.9 billion.
Appeals Court to Hear BP’s Arguments
BP is not the only party who voiced concerns over Judge Barbier’s December 2012 approval of the settlement payout plan. Attorney Brent Coon, of Beaumont, Texas, argued that a rush to “close the deal” resulted in a settlement program “mired in implementation problems.” Coon did not have a role in negotiating the settlement but filed one of many formal objections, asking for revisions to the agreement.
Next month, a US appeals court will hear BP’s objections to the settlement. BP will ask the court to adopt its own interpretation of the settlement terms for businesses. If it does, the “otherwise fatal obstacles” would be eliminated as far as BP is concerned and the entire settlement could be upheld.
Claims Payment Statistics – 2013
As of September 30th, 2013, BP’s website lists a breakdown of total claim payouts as follows (amounts in USD):
- Total Paid – Individual and Business Claims: $10,881,986,745
- Total Paid – Government: $1,458,570,615
- Total Paid – *Other: $328,237,941
- Total Payments: $12,668,795,301
*Includes payments for tourism, seafood marketing and testing, behavioral health, and 2010 contributions.
References:
BP – Claims Information
