BP lauds ruling that injunction needed on oil spill payments

03 October 2013 12:30  [Source: ICIS news]

LONDON (ICIS)--Global energy giant BP is “extremely pleased” with a US appellate court ruling that ordered the district court overseeing Deepwater Horizon oil spill settlement payments to issue an injunction staying payments to those claims that do not meet more stringent standards, the UK-based company said on Thursday.

In a 2-1 decision, the three-judge panel at the US Court of Appeals for the Fifth Circuit reversed District Judge Carl Barbier’s decision that affirmed interpretation of the administrator of the Court Supervised Settlement Program (CSSP) in regard to payments and asked Barbier to “expeditiously craft” an injunction that “allows the time necessary for deliberate reconsideration” of the questions regarding the standards, court documents stated.

The appellate court decision “affirms what BP has been saying since the beginning: claimants should not be paid for fictitious or wholly non-existent losses,” the company said. “We are gratified that the systematic payment of such claims by the claims administrator must now come to an end.”

BP had filed four requests for a temporary halt to the settlement payments related to the 2010 oil spill in the Gulf of Mexico, with none of them garnering approval from Barbier.

In September, court-appointed investigator Louis Freeh said in his initial report on the CSSP that the programme had “problematic” conduct by certain employees and but that the problems should not prevent the CSSP from “fairly and efficiently processing and paying honest and legitimate claims in a timely manner”.

In its last injunction request, BP asked the court to issue an order to halt the settlement payments until claims administrator Patrick Juneau or Freeh can reform the programme.

BP in March filed its first motion for a preliminary injunction to halt payments to certain business economic loss claims based on what it called "fictitious losses”. Judge Carl Barbier denied the motion in April.

In July, Barbier appointed 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 filed its third request in August, saying it had discovered new evidence of problems within the programme. Barbier also denied that motion.

By: Jeremy Pafford
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