BP complains of 'injustices' in oil spill claims process

BP sought the intervention of federal judges in New Orleans yesterday in the way a court-appointed administrator is assessing and approving claims for payments from a partial settlement over the 2010 oil spill in the Gulf of Mexico, calling on them correct what it termed "irreparable injustices".

Billions of dollars of settlement payments are at stake for the oil giant, which initially estimated that it would have to pay just under $8bn (£5.4bn) to resolve claims by affected residents and business in the Gulf coast. Concerned that the final figure could far exceed its estimate, BP's lawyer attacked the process being followed by Patrick Juneau, the court-appointed administrator. "Irreparable injustices are taking place and money is being dispensed to parties from whom it may not be recoverable," Ted Olson, a former US solicitor general, said in his opening argument before a panel of three federal judges.

But a lawyer representing local businesses and residents, Samuel Issacharoff, said that BP was well aware of the terms of the settlement. "There is no order of the lower court that is capable of being reviewed by this court," he said, questioning the appeals panel's authority to amend the settlement deal.

Mr Issacharoff said BP had been wrong in its estimate of how much it would have to pay out under the deal. "They costed it out in a way we thought was erroneous from the very beginning," he claimed.

BP, whose appeal does not affect payouts to individuals, has said the claims administrator had misinterpreted the settlement. The oil giant's head of US communications, Geoff Morrell, has said that this had "ignited a feeding frenzy among trial lawyers attempting to secure money for themselves and their clients that neither deserves".

The spill occurred in April 2010, when an explosion on board the Deepwater Horizon oil rig killed 11 people and triggered a massive release of oil in the Gulf of Mexico, damaging the environment and leading to losses for individuals and business in the local economy.

Mr Juneau was appointed to oversee the settlement by US District Judge Carl Barbier, who earlier this year presided over the first phase of a non-jury trial meant to examine whether the oil giant or the companies involved in the spill were grossly negligent.