US Federal Appeals Court Rejects BP Bid to Halt Oil Spill Payments

A US federal appeals court rejected British energy major BP's bid to prevent businesses from recovering money over the 2010 Gulf of Mexico oil spill, even if they could not link their economic losses to the disaster.

By a 2-1 vote, the 5th US Circuit Court of Appeals in New Orleans upheld a 24 December ruling by US District Judge Carl Barbier in New Orleans, authorising the payments on so-called business economic loss claims. It also said an injunction blocking payments should be lifted.

The ruling is a setback for BP's effort to curb payments in the wake of the April, 2010 explosion off BP's Deepwater Horizon drilling rig and rupture of BP's Macondo oil well. The disaster killed 11 workers and sent more than 4 million barrels of oil into the sea.

The 5th Circuit also said settlement administrator Patrick Juneau retained the authority to eliminate fake claims, without having to perform the "gatekeeping" function that BP had sought.

Only Circuit Judge Edith Brown Clement disagreed, saying the decision wrongly helped claimants whose losses had "absolutely nothing to do with Deepwater Horizon or BP's conduct."

BP spokesman Geoff Morrell said the firm disagreed with Monday's decision, believing that the claimants were not "proper class members" under the settlement. Morrel said BP would consider a further appeal.

Pursued by Reuters, a spokesman for Juneau did not immediately respond to a request for comment.

"The settlement agreement does not require a claimant to submit evidence that the claim arose as a result of the oil spill," Circuit Judge Leslie Southwick wrote for the majority.

Terms of the settlement "are not as protective of BP's present concerns as might have been achievable, but they are the protections that were accepted by the parties and approved by the district court," the judge added.

Steve Herman and Jim Roy, who represent the business claimants, said in a joint statement: "Today's ruling makes clear that BP can't rewrite the deal it agreed to," reported the news agency.

As of 3 March, about $3.84bn (£2.3bn, €2.8bn) had been paid out to 42,272 claimants, according to Juneau's claims website.

BP initially estimated that its settlement with businesses and individuals harmed by the Gulf of Mexico disaster would cost $7.8bn. As of 4 February, it had boosted that estimate to $9.2bn, and said this sum could grow "significantly higher."

Barbier had ruled that BP would have to live with its earlier interpretation of a multi-billion dollar settlement deal over the spill, in which some businesses claiming losses were presumed to have suffered harm.

The case is In re: Deepwater Horizon, 5th US Circuit Court of Appeals, Nos. 13-30315 and 13-30329.