BP escalates efforts to block 'inflated' claims
BP is sending letters to lawyers for hundreds of businesses that it believes have received excessive compensation payments under the settlement for victims of the 2010 Deepwater Horizon disaster, warning them that they might have to pay the money back.
It has also put advertisements in US newspapers on Wednesday, accusing "trial lawyers and some politicians" in the Gulf of Mexico region of "encouraging the submission of thousands of claims for inflated losses".
The moves mark a significant escalation by BP in its campaign to block what it sees as unjustified payments for businesses' economic losses under the settlement agreement for victims of the spill, which was reached last year. It believes the cost of those excessive payments could run into the billions of dollars.
The company has also been pushing for the appointment of an independent investigator to be appointed to review the administration of claims under the settlement, which is being led by Patrick Juneau, a Louisiana lawyer.
Last week, BP wrote two letters to Carl Barbier, the federal judge hearing the case over the spill in New Orleans, alleging "extremely high costs and low productivity" at the court supervised administration programme.
It also raised allegations of "potentially criminal behaviour" by individuals working for the administrator.
In the letters sent out this week to law firms representing businesses that BP believes have been overpaid under the settlement, the company said it was fighting in the courts to overturn the decisions by Mr Juneau that had led to the excessive payments.
The case is now being heard by the Fifth Circuit court of appeals in New Orleans, with a hearing scheduled for July 8.
The letters say: "If BP prevails in that pending Fifth Circuit appeal, therefore, BP expects that the claims administrator will fulfil his fiduciary duties by seeking to recover all excessive claims payments made by the court-supervised settlement programme".
The letters go on: "You may wish to advise your client to consider the effect of such potential obligations for budgeting and planning"; in others words, they should possibly not spend it all.
BP said: "We believe that the claims administrator has misinterpreted the settlement agreement, resulting in substantial payments to businesses that did not suffer losses from the spill. The letters we are sending put claimants' lawyers on notice that, should we prevail on our appeal, BP will seek to recover payments to which claimants are not legally entitled."
That message is being reinforced by BP's new newspaper adverts, which for the first time carry a different message from the pledge to do whatever the company has to do to "make it right" for the Gulf of Mexico region.
The company's advert in three leading US newspapers on Wednesday says: "Whatever you think about BP, we can all agree that it's wrong for anyone to take money they don't deserve.
It adds: "While we are actively litigating the payments by the claims programme for inflated and even fictitious losses, we remain fully committed to paying legitimate claims due to the accident."
Last week, BP wrote two letters to Carl Barbier, the federal judge hearing the case over the spill in New Orleans, alleging "extremely high costs and low productivity" at the court supervised claims programme.
It also raised allegations of "potentially criminal behaviour" by individuals working for the administrator.
Mr Juneau has objected to BP's attempts to raise the public profile of the issue, saying: "The proper venue to address these issues is the court."
Credit: By Ed Crooks in New York
(Copyright Financial Times Ltd. 2013. All rights reserved.)


