Judge rejects BP bid to avoid paying out to some Gulf businesses over oil spill

A US judge has rejected BP’s argument that a multibillion-dollar settlement over the company’s massive 2010 Gulf of Mexico oil spill should not compensate businesses if they cannot prove their losses were caused by the spill.

District Judge Carl Barbier said in his ruling yesterday the settlement was designed to avoid the delays that would result from a “claim-by claim analysis” of whether each claim can be traced to the spill.

Lawyers argued that BP had originally urged him last year to approve a blanket settlement and were effectively contradicting themselves.

Judge Barbier said requiring claimants to meet BP’s proposed requirements for connecting losses to the spill would bring the claims process to a “virtual standstill”.

Two lawyers acting for businesses making claims said Steve Herman and Jim Roy said they should be pleased that Judge Barbier “once again rejected BP’s efforts to rewrite history and the settlement”.

They said: “The court reaffirmed that the transparent, objective formulas spelled out in the agreement are the only way to determine a claimant’s eligibility and causation.”

BP spokesman Geoff Morrell said the company disagrees with Judge Barbier’s decision. He also said court-appointed claims administrator Patrick Juneau’s interpretation of settlement terms renders the deal “unlawful”.

Mr Morrell said: “Awarding money to claimants with losses that were not caused by the spill is contrary to the language of the settlement and violates established principles of class action law. BP intends to seek appropriate appellate remedies to correct this error.”

For months, BP has argued that the judge and Mr Juneau misinterpreted settlement terms in ways that could force the company to pay for billions of dollars in bogus or inflated claims by businesses. In October, Judge Barbier was ordered by a three-judge panel of the 5th US Circuit Court of Appeals to craft a “narrowly-tailored” order that bars Mr Juneau from paying certain claims.

BP, however, argued Judge Barbier did not go far enough when he issued an order to comply with the 5th Circuit’s directives.