GO
Loading...

BP CEO hits out at class action lawsuits

Class action lawsuits like the ones BP is facing in the U.S. are a "business model" that serve only to benefit attorneys, the chief executive of BP told CNBC.

"The biggest beneficiaries that I can see broadly are plaintiffs' attorneys themselves, who are not just collecting fees on behalf of claims that have been submitted but also their own firms which are submitting large claims," Bob Dudley said on Tuesday.

His comments came on the day BP said its $20 billion oil spill compensation fund has almost run out, after provision for costs leaped by $1.4 billion in the second quarter.

The British oil company has just $300 million left in the fund, and the deadline to file an economic loss claim among Gulf coast businesses - which make up the bulk of claims - is not until April next year.

BP has said claims beyond what the fund can pay will be taken straight out of future profits. The company has also increased its overall provision for the Gulf of Mexico oil spill to $42.4 billion from $42.2 billion.

BP shares fell 4.5 percent in London on Tuesday morning, before recovering to close around 3.4 percent lower.

Dudley said BP had no problems with paying for "legitimate" claims but that the agreement with the U.S.Department of Justice that allowed people to claim for compensation was being mis-interpreted.

"This is not right, it's not good for American business... that's why we're vigorously protesting it. It happens all the time in the U.S. with this class action plaintiff system which is an industry and a business model."

(Read more: Halliburton pleads guilty to destroying Gulf spill evidence)

The oil major is locked in a legal battle over compensation payouts with the administrator Patrick Juneau. It says Juneau is paying out "fictitious" claims due to a misinterpretation of the settlement.

BP also faces a resumption of its trial on civil charges in September.

Stripping out the one-time charges, the company reported second quarter profit from operations declined 24 percent from the year-ago period, missing expectations.

(Read more: US energy production growing by leaps and bounds: BP)

Adjusted net profit came in at $2.712 billion compared with expectations of $3.410 billion and $3.6 billion a year ago.

-- Reuters contributed to this report.

Follow us on Twitter: @CNBCWorld

Contact Earnings

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More