BP wins right to appeal some Gulf spill damages claims

A U.S. federal appeals court on Friday said BP deserves the right to appellate review of some damage claims awarded to people and businesses in connection with the 2010 Gulf of Mexico oil spill.

The decision by the 5th U.S. Circuit Court of Appeals in New Orleans could help BP limit its payout to victims of the explosion of the Deepwater Horizon drilling rig, which killed 11 workers and caused the largest U.S. offshore oil spill.

Fire boat response crews battle the blazing remnants of the off shore oil rig Deepwater Horizon in the Gulf of Mexico on April 21, 2010.
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Fire boat response crews battle the blazing remnants of the off shore oil rig Deepwater Horizon in the Gulf of Mexico on April 21, 2010.

BP originally expected to pay $7.8 billion to resolve claims under a 2012 settlement, but by late April it had boosted its estimate to $10.3 billion, according to a regulatory filing.

About $5.13 billion has been paid out so far to 63,597 claimants, according to a website maintained by claims administrator Patrick Juneau.

In its appeal, BP complained that rules adopted by U.S. District Judge Carl Barbier compromised its right to appeal awards he approved and which the company did not like to the 5th Circuit.

Writing for the appeals court, Judge Fortunato Benavides said BP deserved that right to appeal because it did not expressly waive it.

"Where a settlement agreement does not resolve claims itself but instead establishes a mechanism pursuant to which the district court will resolve claims, parties must expressly waive what is otherwise a right to appeal from claim determination decisions by a district court," the judge wrote.

"The point at which a party seeks the district court's discretionary review is the point at which further review by this court becomes a possibility," Benavides added.

The 5th Circuit separately rejected BP's appeal of awards to three non-profit groups. Lawyers for spill victims had accused BP of appealing the awards as a means to relitigate the entire settlement.

Samuel Issacharoff, a lawyer for the victims, declined immediate comment. BP had no immediate comment.

BP is awaiting a decision from Barbier assessing penalties under the federal Clean Water Act over the spill.

London-based BP has already taken $43.8 billion in pre-tax charges for clean-up and other costs.

The cases are In re: Deepwater Horizon, 5th U.S. Circuit Court of Appeals, Nos. 13-30843, 13-31296, 13-31299, 13-31302.