Environmental

Judge strikes down BP’s efforts to recoup money paid on oil spill claims

bpstat Judge strikes down BP’s efforts to recoup money paid on oil spill claimsA federal judge in New Orleans overseeing the BP oil spill litigation said that the company will not be permitted to take back hundreds of millions of dollars it paid out to victims harmed by the massive 2010 Gulf oil spill.

BP had sought to recoup payments it considered excessive from some oil spill claimants. Those payments were calculated under the accounting methods established by the 2012 settlement agreement, before Judge Carl Barbier ordered the claims administrator’s office last year to implement new accounting procedures BP considered fairer.

However, Judge Barbier found in a hearing last week that the payments in question “were paid under the settlement’s terms as it was interpreted by the claims administrator and the court at that time.”

“The fact that the decision and the interpretation were later reversed does not equate to fraud or anything close to it by these claimants,” Judge Barbier said.

Oil spill claim forms containing language from the settlement on the first page may have been an influential factor in the judge’s decision. The forms, which BP approved under the settlement, clearly state that the amount paid would not change due to future events.

“It is possible that the terms of the proposed settlement may change in the future — for better or for worse — as a result of further legal proceedings,” the forms state. “However, if you sign this individual release, none of those uncertain future events will affect you.”

BP had argued that its attempt to reclaim payments it deemed excessive or fictitious did not counter the agreement on the forms. Judge Barbier disagreed, calling BP’s gesture “classic hairsplitting.” The judge said that those who filed fraudulent claims have been ordered to return the money, but that fraud wasn’t an issue in most of the claims.

BP said it disagrees with the court’s ruling and will appeal.

Sources:

BusinessWeek
New York Times
Fortune