Oil giant BP has gone back to court to fight “fictitious and inflated” compensation claims for the 2010 Gulf of Mexico disaster which it warns threaten its future.
A panel of United States appeal court judges have begun hearing the group’s appeal over how its £5.2billion claims settlement is being handled – which it says has sparked a “feeding frenzy” and is allowing businesses from the Gulf coast to claim for “non-existent, artificially calculated losses”.
The blow-out of the Deepwater Horizon well off the Louisiana coast in 2010 claimed 11 lives and damaged fishing and tourism industries as well as marine and wildlife habitats, forcing BP to agree a multi-billion-dollar compensation deal in April 2012.
But BP warned in court filings that it will be “irreparably harmed” unless the compensation system is reformed. The oil giant has reportedly said the cash drain could put its dividend at risk and make it vulnerable to a takeover.
The company argues the court-appointed claims administrator and judge who approved the deal have misinterpreted the settlement to produce “absurd and egregiously inflated payouts”.
In a court filing, BP said: “The result is that thousands of claimants that suffered no losses are coming forward in ever-increasing numbers, seeking and obtaining outrageous windfalls and making a mockery of what was intended to be a fair and honest court-supervised settlement process.”
BP’s appeal was being heard by a three-judge panel of the Fifth US Circuit Court of Appeals in Louisiana. It could take five to six weeks before the court hands down a judgement.
The company’s complaint is based on the way businesses are allowed to compare earnings before and after the spill in favourable ways which appear to inflate losses.
“Not only is the claims administrator’s misinterpretation contrary to the plain language of the settlement agreement and the intent of the parties, but it has ignited a feeding frenzy among trial lawyers attempting to secure money for themselves and their clients that neither deserves,” BP said.
“We are asking the Fifth Circuit to follow established legal principles of contract law and interpret the agreement as written and intended: paying only those claimants who suffered actual losses.”
Its complaint cites a £6.5millionpayout to a construction company based 200 miles from the coast of Alabama, even though 2010 was its best year on record.
BP has already disposed of £25billion worth of assets to cover the known costs of the disaster.
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