| LONDON, June 26
LONDON, June 26 Britain's BP has stepped
up its campaign for a revision of the way compensation for its
2010 Gulf of Mexico oil spill is calculated by placing
advertisements in leading newspapers ahead of a July 8 appeal
court hearing in the United States.
The oil major's advertisements in the Wall Street Journal,
New York Times and Washington Post back its attempt to put a lid
on payments in the billions of dollars, which the company has
said could leave it "irreparably harmed".
BP has no control over its payments to claimants, having
agreed a compensation formula and framework in a legal
settlement covering certain personal and business liabilities.
While the company insists that the formula is being
misinterpreted, the court-appointed claims administrator
disagrees and its process has been upheld by the New Orleans
federal court that is dealing with a host of legal issues
surrounding the 2010 disaster.
BP hopes to have that decision overturned at its July 8
hearing at the United States Court of Appeals for the Fifth
"Trial lawyers and some politicians are attempting to
capitalise on this misinterpretation by encouraging the
submission of thousands of claims for inflated losses, or losses
that do not even exist," BP said in its advertisement.
"Whatever you think about BP, we can all agree that it's
wrong for anyone to take money they don't deserve. And it's
unfair to everyone in the Gulf - commercial fishermen,
restaurant and hotel owners, and all the other hard-working
people who've filed legitimate claims for real losses."
In a separate development last week, BP sought to use
allegations against a member of claims administrator Patrick
Juneau's team to back its case for a full review of the claims
Juneau placed team member Lionel Sutton on administrative
leave and filed a report to the New Orleans court judge Carl
Barbier about allegations that Sutton had referred claimants to
other lawyers in exchange for a cut of subsequent compensation.
Juneau later issued a statement anouncing that Sutton had
resigned and that the allegations would be investigated
BP described the affair as "troubling" and repeated its
request for "a comprehensive and public audit of the settlement
programme by a reputable national accounting firm".
Sutton did not respond to phone calls and emails requesting
comment, but Associated Press last week quoted him confirming
that he had been suspended.
Much of BP's argument hinges on an interpretation of
accountancy terms that the company says is too loose. One of the
key triggers for a so-called business economic loss claim is the
ability to show a lower revenue, higher expense, or both, during
and/or after the oil spill, compared with other periods.
Proof of a connection with the spill itself is not necessary
in most cases.
BP argues that a loose definition of what constitutes
revenue and expenses produces more volatile figures and is
allowing businesses to be classed as eligible claimants even
though there is no real longer-term impact on profit.
The company's case against the compensation payouts was
backed by a group of accountancy professors last month.
However, BP has said that the nature of the disputed
compensation payments - many small, individual payouts - means
that recovering them through further litigation would be next to
In April, BP added $500 million to its estimate of
compensation payouts under the settlement based on what it knows
so far. Its best guess is for a total of $8.2 billion of
business economic loss and other compensation claims, with only
$1.7 billion left in the $20 billion pot it set aside for paying
these and other costs.
BP has a total of $42.2 billion set aside in its accounts
for clean-up costs, fines and compensation for the oil spill,
which killed 11 men and devastated the Gulf of Mexico coastline.
The extra compensation payouts BP is contesting may end up
as a relatively small part of the final bill. Other
developments, such as being found grossly negligent rather
negligent, could increase its liability by much more.