Gulf of Mexico Oil Spill: US Appeals Court Upholds BP Disaster Settlement Approval

A US federal appeals court on 10 January affirmed a federal judge's approval of a multi billion-dollar settlement between BP and businesses and individuals who suffered economic losses in the 2010 Gulf of Mexico oil spill.

In the 2-1 decision, a panel of the 5th US Circuit Court of Appeals ruled that US District Judge Carl Barbier was correct in rejecting a BP bid, which required businesses seeking compensation to provide proof that traced their economic losses to the oil spill.

The plaintiffs, including hotel owners and oyster gatherers, welcomed the ruling.

The court panel noted that BP had failed to explain "how this court or the district court should identify or even discern the existence of 'claimants that have suffered no cognizable injury.'"

"We cannot agree with the arguments raised by the objectors or BP," the 48-page ruling read, citing federal rules governing class action lawsuits. "Neither class certification nor settlement approval are contrary to Article III in this case," it added, referring to federal law, reported AFP.

However, judge Emilio Garza disagreed. "Whether a class member was economically injured is immaterial if that loss was not caused by the oil spill," Garza said in a 14-page dissent.

"Today's ruling is an enormous victory for the Gulf, and an important step forward in ensuring that every eligible claimant is fully compensated according to the objective, transparent formulas spelled out in the settlement agreement that BP co-authored and agreed to," lawyers Steve Herman and Jim Roy said in a statement.

As of 26 December, about $3.81bn (£2.31bn, €2.78bn) had been paid out to 40,371 spill claimants, according to settlement administrator Patrick Juneau's claims website.

Earlier, BP had argued 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.

Assets Worth $38bn Sold

In October 2013, BP said 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.

Earlier, BP revealed 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.