British Petroleum (BP) PLC (LON:BP)) is set to argue in a court hearing on Monday that some firms are wrongfully claiming compensation from the 2010 BP oil spill disaster, as ineligible claimants take advantage of an administrator’s supposed misinterpretation of an earlier court settlement.
BP has claimed throughout this year that a 2012 settlement with a class action group of plaintiffs has been misinterpreted by claims administrator Patrick Juneau, allowing businesses who were not directly impacted by the spill to claim funds, reports Reuters.
Claims filed against the oil giant’s compensation fund have risen 18 percent over the last six weeks to 195,403.
Geoff Morrell, BP’s head of U.S. communications, told Reuters that Juneau’s misinterpretation is contrary to the plain language of the settlement and the intent of the two parties.
“It has ignited a feeding frenzy among trial lawyers attempting to secure money for themselves and their clients that neither deserves,” said Morrell.
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At issue is a key clause about business and economic loss, where businesses do not necessarily have to prove a cause-and-effect connection between lower revenue and higher expenses before and after the disaster.
Claimants and Juneau said in court papers that BP’s appeal against granting these payouts effectively reneged on the terms of the settlement, and “introduced a subjective causation element.”
BP has earmarked $42.2 billion specifically for cleanup costs, fines and compensation related to the 2010 oil spill. The compensation at stake in this court hearing is relatively small compared to the final possible bill, especially if BP’s behavior during the disaster are ruled grossly negligent by a judge.
The case will be argued in a federal appeals court in New Orleans.