$9.2 Billion British Petroleum Oil-Spill Settlement

British Petroleum, Europe’s second-largest oil company, recently lost an appeal regarding the $9.2 billion settlement for the Gulf of Mexico oil spill. The federal appeals court in New Orleans instructed BP that they must abide by the terms of the settlement. BP had claimed that the administrator was misinterpreting the terms of the deal. As a result of the ruling, BP must resume payments on business-loss claims which were temporarily stopped while the company appealed the terms of the payments. BP was fighting to block payments for losses that were not directly linked to the oil spill. BP is paying millions of dollars in claims related to the largest offshore oil spill in United States history. In April 2010, BP’s Deepwater Horizon oil rig exploded and sank off the Louisiana coast, killing 11 people and gushing oil into the ocean for 87 days. The U.S. government estimates the total oil discharge at 4.9 million barrels or 210 million U.S. gallons. Due to the massive spill, extensive damage to wildlife and marine habitats, the tourism and fishing industry, and human health problems have occurred. BP reached a settlement with most private plaintiffs just before the liability trial began. BP also pled guilty to 11 counts of manslaughter and other criminal charges. BP originally estimated the loss at $7.8 billion but later increased the amount to $9.2 billion. BP indicates these losses may continue to increase because the estimate does not account for claims that have not been received or processed by the claims administrator. According to Patrick Juneau, the claims administrator, more than 85,000 claims remain to be reviewed. BP publicly disagrees with the decision by the appeals court, stating that BP believes some claimants are not proper members of the settlement class because their losses are not directly linked to the Deepwater Horizon oil spill. BP maintains that it is reviewing its appellate options regarding the claims. BP’s settlement estimate does not include losses claimed by more than 250 financial institutions, 900 companies, 700 casinos, or 750 state and local governments impacted by the ban on deep-water drilling that the Obama administration instituted following the accident. A maritime attorney for victims of the oil spill says the deadline for filing additional claims does not expire until six months after BP completes its appeals. Anyone who has been affected by the oil spill should contact an oil rig accident attorney or an offshore injury lawyer. In its recent ruling against BP, the court specified that anyone submitting a claim in the case must affirm that the damages were caused by the spill. The damages must match the loss patterns defined in the agreement. Any suspicious claims can be investigated to identify potential fraud. BP indicates that claims by local and state governments are based on “seriously flawed” methodologies, with losses estimated at more than $34 billion if the judge overseeing the litigation permits all claims and triples them due to a ruling of gross negligence. BP also faces pollution fines of up to $17 billion under the United States Clean Water Act. The fine is calculated based on the number of oil spills and the level of negligence, and the amount will be determined at trial. BP has claimed that the settlement is invalid unless victims will be required to prove their losses were directly connected to the oil spill. The three-judge appeals court upheld the terms of the settlement, ruling that the agreement met all legal requirements for class action settlements. The court majority and the lead attorneys for the spill victims both indicated that BP agreed to the terms of the deal and is now wishing to rewrite the terms.