BP wins review of Gulf payouts

A US federal appeals court has revived BP’s claims that a judge’s interpretation of a settlement over its 2010 oil spill in the Gulf of Mexico could force the company to pay billions of dollars for bogus or inflated claims by businesses.

A ruling by a divided three-judge panel threw out US district judge Carl Barbier’s rulings on the dispute between BP and lawyers who brokered the multibillion-dollar settlement in 2012. The panel sent the case back to Judge Barbier with an order that he craft a “narrowly-tailored injunction that allows the time necessary for deliberate reconsideration of these significant issues”.

The April 2010 blowout of BP’s Macondo well off the Louisiana coast triggered an explosion that killed 11 workers on the Deepwater Horizon drilling rig and led to millions of gallons of oil spilling into the Gulf.

Shortly after the disaster, BP agreed to create a $20 billion (£12.3bn) compensation fund that was administered at first by the Gulf Coast Claims Facility, led by lawyer Kenneth Feinberg.

BP argued that Judge Barbier and court-appointed claims administrator Patrick Juneau misinterpreted terms of the settlement. Plaintiffs’ lawyers countered that BP undervalued the settlement and underestimated how many claimants would qualify for payments.

A BP spokesman said the company was “extremely pleased” with the ruling. He added that it “affirms what BP has been saying since the beginning: claimants should not be paid for fictitious or wholly non-existent losses”.

“We are gratified that the systematic payment of such claims by the claims administrator must now come to an end.”