Deepwater Horizon Disaster: US Judge Rejects BP Demand for Proof of Oil Spill Losses

BP failed to convince a US federal judge that businesses seeking compensation over the 2010 Gulf of Mexico oil spill needed to provide proof that traced their economic losses to the disaster.

US District Judge Carl Barbier said in New Orleans the British firm would have to make do with the court's earlier interpretation of a settlement deal over the oil spill -- certain businesses could be presumed to have borne the brunt of the spill if their losses reflected certain patterns.

Barbier said BP could not adopt a new stand on the reason behind the damages, and reverse an interpretation that it had earlier termed "more than fair", even if this resulted in the oil giant incurring substantially higher costs under a multi-billion dollar settlement deal.

Barbier also said that settlement administrator Patrick Juneau's evaluation methods required changes. Earlier, an appeals court in New York ordered Barbier to review Juneau's methodology.

BP's view "is not only clearly inconsistent with its previous position, it directly contradicts what it has told this court," Barbier ruled.

"The court further finds that BP's change of position was not inadvertent," reported Reuters.

The judge directed Juneau to "implement an appropriate protocol or policy for handling business economic loss claims in which the claimant's financial records do not match revenue with corresponding variable expenses".

In response, Geoff Morrell, a BP spokesman, 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."

Barbier also handles litigation to assign blame and financial accountability for the disaster, the largest US offshore oil spill, off the coast of Louisiana.

BP has complained that the cost of settlement was growing owing to "fictitious" claims; and because Juneau had disbursed too much and compensated people and businesses who did not suffer property damage or economic loss.

So far, about $3.81bn (£2.32bn, €2.78bn) had been paid out to 40,371 spill claimants, according to Juneau's claims website.

Assets Worth $38bn Sold

BP said in late October that the economic-settlement would cost $9.2bn and added that the sum could grow "significantly higher." The firm had earlier estimated that payouts would total $7.8bn.

BP revealed in October that it sold assets worth $38bn to pay for the 2010 oil spill.

In BP's latest financial results, the group said it had raised its overall cumulative charge for the spill to $42.5bn.

The April 2010 explosion on BP's Deepwater Horizon rig, which killed 11 workers and sent more than 4 million barrels of oil into the sea, is one of the worst environmental disasters in history.

The case is In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, US. District Court, Eastern District of Louisiana, No. 10-md-02179.