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.