BP faces fresh blow in Gulf of Mexico spill compensation row

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BP faces fresh blow in Gulf of Mexico spill compensation row

Mon, 13 January 2014
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BP faces fresh blow in Gulf of Mexico spill compensation row
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Oil giant BP has suffered another setback in its bid to limit compensation payouts for the Gulf of Mexico oil spill after a US court rejected its latest appeal.

The group has lost an appeal against what it had argued was the faulty administration of a 2012 compensation settlement for the Deepwater Horizon accident in 2010, which it claimed was leading to excessive or imaginary claims.

A panel of the 5th US Circuit Court of Appeals on Friday backed a federal judge's approval of the multi-billion dollar deal between BP and businesses and people who lost money and property in the spill, saying it was fair.

Two out of three judges on the appeal court panel rejected BP's arguments. The court said the company had failed to explain "how this court or the district court should identify or even discern the existence of 'claimants that have suffered no cognizable injury.'"

BP is still awaiting the outcome of a separate appeal court panel's ruling on causation issues linked to compensation payments.

The oil major said it was considering legal options after the court's decision.

"BP will continue to press its position on the proper interpretation of the settlement agreement's provisions requiring a causal nexus between a claimant's injury and the spill," a BP spokesman said.

BP had originally forecast its settlement in the case would cost $7.8bn, but says it could now top $9.2bn.

The company still faces possible fines under the Clean Water Act. It has made numerous legal attempts to curb payouts linked to the spill after taking provisions for $42.4bn to cover the clean-up, compensation and fines.

Shares in BP fell 3.08p to 494p around midday in London.