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BP drops Gulf of Mexico overpayment legal case

02 November 2015

BP has dropped its bid to recoup hundreds of millions of dollars from businesses it claimed were wrongly handed compensation following the Gulf of Mexico oil spill five years ago. The energy company believed lawyers for victims of the disaster, which killed 11 men and caused millions of barrels of oil to flow into the sea, and the claims administrator misinterpreted its settlement.

Deepwater Horizon - Image: USCG
Deepwater Horizon - Image: USCG

As a result, businesses were allowed to claim money from BP's compensation scheme without proving the spill caused financial losses, the company alleged.

After a 2012 settlement with businesses and individuals was approved, BP argued that the claims administrator had not been correctly matching business’ revenues and expenses, resulting in overpayments.

A court eventually ordered a new calculation method but refused to order restitution of payments already made.

On October 30, BP and lawyers for the spill victims filed a joint stipulation to dismiss the British firm's appeal against the judge's decision.

Geoff Morrell, BP's spokesman, said: “Although we have a strong case for restitution, we opted to withdraw our appeal so that all the parties can better focus on winding down the claims programme efficiently and expeditiously.”

Last year BP claimed that it was only fair that businesses return overpayment from its compensation scheme.

“No one disputes that the claimants whose windfalls the Court has now upheld have been paid money they didn’t deserve for losses they didn’t suffer," Mr Morrell said previously. "For BP to have asked for the return of that money was not contrary to the release or any other part of the agreement – it was an attempt to reach the only fair outcome.”

However, US District Judge Carl Barbier, in New Orleans, disagreed.

Earlier this year BP agreed the largest corporate settlement in US history over the explosion on the Deepwater Horizon drilling rig, paying more than $20bn (£13.2bn) in fines.

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