US judge denies BP's third request for halt on Deepwater payments

28 August 2013 17:26  [Source: ICIS news]

HOUSTON (ICIS)--A US district court judge on Wednesday denied BP’s third request for a temporary halt on settlement payments related to the 2010 Deepwater Horizon oil spill.

Earlier this month, BP filed a motion for preliminary injunction, again asking Judge Carl Barbier to suspend payments from the Court Supervised Settlement Program (CSSP) while the claims programme is under investigation, saying it has discovered new evidence of problems.

BP claimed the law firms of two appeal panellists were representing claimants and submitting claims while the panellists were issuing rulings over disputed claims. Additionally, BP learned through its fraud hotline that a CSSP employee allegedly assisted claimants in submitting fraudulent claims in exchange for a portion of the settlement awards.

In his order on Wednesday, Barbier said an investigation undertaken by retired Federal Bureau of Investigation (FBI) agent David Welker “has not found any credible evidence to support the allegations of fraud involving the employees at the Mobile Claims Assistance Center”.

In regard to the allegations involving the appeals panellists, Barbier said they are appointed and supervised by the court and not by the claims administrator, so this was an issue for the court.

Barbier added that one panellist contacted Magistrate Judge Sally Shushan upon learning that his law firm had filed a claim with the CSSP. He withdrew from the firm and continues to serve as a panellist but was never assigned an appeal involving his former firm.

Another panellist’s firm had filed a claim without his knowledge. All appeal assignments to this panellist have been suspended while the panellist decide if he wants to withdraw from any financial interest in his firm and remain on the panel.

A third panellist reported that his wife’s law firm had filed a claim. He has resigned as an appeal panellist.

Barbier pointed out that none of the claims by the firms of the two panellists have been approved, paid or appealed. With the third panellist, only a hand full of his firm’s claims have been paid, and none were appealed.

In March, BP filed a motion for preliminary for injunction to halt payments to certain business economic loss claims based on what it called "fictitious losses”, which Barbier denied in April.

In July, Barbier appointed former FBI director Louis Freeh to perform an investigation into possible ethics violations or misconduct within the CSSP, following allegations that one of the staff attorneys was referring claims to a Louisiana law firm in exchange for a share of subsequent settlement payments.

Later that month, BP filed a motion for an emergency preliminary injunction after discovering “wrongdoing by two senior attorneys” for the CSSP, which Barbier also denied.

BP did not immediately respond on Wednesday to a request for comment.

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By: Tracy Dang
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