Will This Decision Change BP’s Approach to Deepwater Horizon Claims?
As BP (NYSE:BP) continues its defense itself against Deepwater Horizon civil suits, the company knows that claims stemming from the 2010 oil spill will continue being paid as planned. BP’s day in New Orleans court Friday was a loss for the oil giant, which had claimed many of the payments to those affected by the disastrous spill were misappropriated.
District Judge Carl Barbier — who is hearing the civil case against BP — dismissed the movements by BP’s legal team on Friday and will continue with the ongoing case. BP was unhappy with the way Patrick Juneau (the administrator appointed by Judge Barbier) awarded many claims of lost business and other type of damage. However, Barbier was unequivocal in his ruling, noting that the settlement included the anticipation of fraudulent claims.
Barbier wrote that occasional incidences of fraud were “consequences BP accepted when it decided to buy peace through a global, class-wide resolution.” Though the Department of Justice is prosecuting over 400 cases of fraud stemming from the Deepwater Horizon settlement, the judge was not swayed in the slightest. BP will appeal Barbier’s ruling.
Few analysts expected the court to alter the terms of the Deepwater Horizon settlement. As Barbier noted, BP was involved in every aspect of the process. Its legal team was responsible for drawing up the terms of payments, including the right of claimants to choose when the money was delivered. Though it allowed for (in Barbier’s words) “false positives,” there would have been much more trouble for BP had the company not decided on the existing terms of the multi-billion dollar settlement.
As it stands, BP could lose a substantial amount of money on fraudulent claims, though it is unlikely the number will reach the billions, as BP’s court filing claimed. Meanwhile, both Barbier and BP have not taken their sights off Halliburton (NYSE:HAL). BP wants penalties for Halliburton for its delays in submitting cement samples as evidence in a related Deepwater Horizon case. Barbier expressed concern over Halliburton’s cooperation during the trial with respect to the evidence though he wouldn’t immediately deliver a ruling on the cement contractor.
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