Halt on BP payments to 'phony' oil-spill victims

Smoke billows over Gulf of Mexico after Deepwater Horizon disaster 2010 Millions of gallons of oil spilled into the Gulf of Mexico after the 2010 disaster

The prospect has receded of BP being financially crippled by an escalation of compensation payments to businesses claiming to be victims of the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

The wording of the agreement it signed on paying compensation had meant, according to BP, that a court-appointed claims administrator was paying too much to some victims and also making payments to businesses that hadn't suffered genuine losses.

This had meant that the costs of the compensation had been rising above BP's original estimate of $7.8bn to perhaps double that.

However last night the US Court of Appeals for the Fifth Circuit approved an injunction against payments being made to businesses that have not suffered "actual injury traceable to loss".

It is not yet clear how much last night's ruling will in the end save BP, because the judges did not throw out the controversial method used by the claims administrator for calculating compensation.

But having had no victories in previous court attempts to slow up the pace of compensation disbursements, BP is inevitably delighted that hundreds of millions of dollars of payments it regards as unmerited will now be halted.

The case will continue in Louisiana's district court.

Such were BP's fears about the potential damage to its business from the scale of compensation payments that it has been sounding out the British government for help in lobbying the US government and authorities.

Robert Peston Article written by Robert Peston Robert Peston Economics editor

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  • rate this

    Comment number 202.

    201.M "still be arguing liability"

    Yes it is curious why BP gave up long before a US company would have done so - there must have been/must be some benefit in doing so.
    Oil spills in warm latitudes tend to disperse quickly, but 210 M barrels is a lot. The Valdez spill might have been just 11 M barrels but as it was very much colder off Alaska it might have lasted far longer & done more damage?

  • rate this

    Comment number 201.

    An American corporation would still be arguing liability.

  • rate this

    Comment number 200.

    Shocking how a country so dependent on oil reacted in such an infantile way when things go wrong in an accident - despite best efforts to stop it, and clear it up.

    All those attempts to con money out of BP, and the anti-British/foreign backlash against the oil company was beneath contempt, especially when they had to replace the CEO with someone with a US accent to sooth them .. vomit inducing

  • rate this

    Comment number 199.

    I see the chap who ran BP and has the presentational skills of a flatulent camel has moved on to even greener pastures as yet unharmed by oil spill.

  • rate this

    Comment number 198.

    197 continued...

    These people are often paid to review books and to give them a bad review or a good one dependent on their paymaster's wishes. Generally you will find absolute statements that admit no doubt. This lack of subtlety shows them up. As I said earlier why even a scientist admits no doubt he/she is not a scientist. Even more so an economist!

    We have to defeat the banocracy.


Comments 5 of 202


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