18 March 2013

BP attempts to curb 'absurd' oil spill payouts

British energy company BP has asked a Louisiana judge to temporarily suspend compensation payouts relating to the Deepwater oil spill, alleging that some of the claims were 'fictitious' and 'absurd'.

By James Barnes

BP: hitting out at compensation claims

According to a BBC report, the oil giant claimed that the lawyer administering the compensation fund is misinterpreting the terms of the agreement and making payouts that are too generous.

Compensation

The company agreed last year to pay compensation to around 100,000 people and companies who claimed the 2010 spill harmed their livelihoods or health.
However, BP claims to have discovered that some companies who made claims were based far from the coast and were given compensation despite records showing their profits had increased in the year of the spill.
According to the report, BP highlighted a $21m payout to a Louisiana rice mill 40 miles inland and $9.7m payment to an Alabama construction company nearly 200 miles from the sea.

Reality

In the filing to a New Orleans court, BP said: ‘BP did not agree to pay what is already hundreds of millions of dollars, and potentially billions, to claimants with 'losses' that do not exist in reality.’
Lawyers representing the claimants responded by accusing BP of undervaluing the settlement and underestimating the number of people and business who meet the claim criteria which BP had agreed to.

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