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BP Gulf Oil Spill Claims – 2013 Update

Residents of Florida and the gulf coast states may still have fresh memories of the images associated with BP’s Deepwater Horizon oil spill catastrophe of April 2010.  Within weeks of the accident, BP began paying claims for economic and property damages to coastal residents and business owners.  Many business owners operating near beaches and resorts rely solely on tourism for survival.  Gulf fishermen of all types also suffered big losses as a result of oil polluted waters.

Though the spill has long since been contained, its effects are still making headlines as millions in loss claims remained unresolved in 2013. 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.

BP Oil Claims Payment Statistics – 2013

As of June 30th, 2013, BP’s website lists a breakdown of total claim payouts as follows (amounts in USD):

  • Total Paid – Individual and Business Claims: $9,886,959,306
  • Total Paid – Government: $1,458,565,326
  • Total Paid – *Other: $317,925,661
  •  Total Payments: $11,663,450,293

*Includes payments for tourism, seafood marketing and testing, behavioral health, and 2010 contributions

In an effort to maintain good faith, BP has released several announcements indicating that its claim payouts will go on for as long as necessary until all legitimate losses have been accounted for.

Recent BP Oil Claims Event: Judge Blocks Effort to Suspend Payouts

On July 26th, a US judge refused BP’s request to temporarily suspend the multibillion dollar compensation program currently paying out claims to Gulf oil spill victims.  US district judge Carl Barbier failed to recognize any legitimate evidence of alleged widespread fraud among claimants and did not feel that a suspension of the program was justified.

In recent months, BP has 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 approached US Judge Barbier with a request to halt claim payouts while alleged misconduct by one of the compensation program’s chief attorneys, Lionel H Sutton III, is under investigation. The investigation was prompted by allegations that Sutton, who resigned his post in late June, had received a portion of the settlement funds for referring claims to a law firm before enlisting his services with the compensation fund. Sutton has denied all allegations.

In the Judge’s denial of BP’s request, he scorned the oil giant for what he called “attempts to smear the lawyer administering claims” due to the fact that officials are unhappy with countless quarters of rising claim payouts. BP defends their position in stating that hundreds of millions in legitimate compensation dollars are being tainted by fraud and corruption, though it failed to produce any evidence of fraudulent payouts to date.

References:

The Guardian – BP effort to shut down compensation program blocked by judge – http://www.theguardian.com/business/2013/jul/19/bp-gulf-oil-spill-compensation-judge

BP – Claims Information – http://www.bp.com/en/global/corporate/gulf-of-mexico-restoration/claims-information.html

Reuters – UPDATE 3-BP braced for legal long-haul as spill payouts leap – http://www.reuters.com/article/2013/07/30/bp-results-idUSL6N0G018620130730

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