Court sets deadline for proposed new oil spill payment rules

BP and attorneys for victims in the Gulf of Mexico oil spill have until 5 p.m. on Tuesday to work out language for a “narrowly tailored” proposal for new rules for some payments in the multibillion-dollar spill settlement, a federal judge said Friday.

The proposed injunction must stay in line with an Oct. 2 federal appeals court ruling, which reversed a lower court’s decision to deny BP’s request to stop payments to claimants in the “business-economic loss” group.

On Oct. 3, U.S. District Judge Carl Barbier ordered BP’s claims administrator to stop payments to a slice of that group, typically small businesses using a cash-based accounting methodology that makes it more difficult to find documentation of when revenues and expenses occurred.

The oil company has paid $3.7 billion to oil spill claimants since last July, according to the claims administrator. But BP has said it could be paying inflated claims under an erroneous reading of a settlement with victims reached last year.

Business-economic loss claimants have so far made up the largest segment of BP’s settlement payments, at $2.1 billion. Barbier wrote on Oct. 3 that suspending all business-economic loss payments “would be overly broad and unnecessary.”

On Friday, Barbier set a hearing on the proposed injunction for Dec. 2.


About The Author

Collin Eaton joined the Houston Chronicle's team of energy reporters in 2013, after covering the financial industry for another publication. He writes mainly about U.S. oil companies and developments in international oil markets.