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Posted by September 24, 2014

Judge Rejects BP Bid to Recoup Some Spill Payments

A U.S. judge has ruled that BP Plc cannot recoup what it says were inflated claims paid under a multi-billion dollar settlement program to compensate people hurt by the 2010 Gulf of Mexico oil spill, NOLA.com reported on Wednesday.

BP originally expected the payout program to cost $7.8 billion, but it has said the final bill, from the uncapped agreement that is handling thousands of claims, could be considerably higher.

The oil major has filed numerous motions to challenge what it says are excessive fees charged by the program's administrator, generous payments made under disputed accounting rules, and phony claims.

U.S. District Court Judge Carl Barbier in New Orleans has thrown out many of those complaints and turned the company down again on Wednesday.

Geoff Morrell, SVP of US Communications & External Affairs for BP, said, “BP disagrees with today’s decision and will appeal it. We asked the Court, as a matter of equity and fairness, to order the return of excessive payments made by the settlement program as a result of what the courts have now determined was the program’s misinterpretation of the settlement agreement’s accounting requirements. This misinterpretation resulted in some claimants receiving awards well in excess of what they are entitled to under the settlement agreement and others receiving awards that weren’t warranted at all. Some of these overpayments were in the millions of dollars. 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. 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.”

The oil company has sustained more than $42 billion in charges from the April 20, 2010 disaster aboard the Deepwater Horizon drilling rig that killed 11 workers and triggered the worst offshore oil spill in U.S. history.

Earlier this month, Barbier found the company "grossly negligent" for the spill, a finding that could greatly increase its fines under the federal Clean Water Act at the next phase of the ongoing civil trial in January, when penalties will be assigned.

(Reporting by Terry Wade; Editing by Bernadette Baum)

BP PlcUnited StatesU.S. District Court