No sooner have the good-will commercials stopped airing from BP, that news that the large victim compensation fund is at risk began to surface.
To remedy what looks like a runaway expenditure, BP is now challenging the court ruling to try to escape further funding for disbursement of the victims altogether.
A court appointed claims administrator, Mr. Juneau, has already procesed about 25% of the almost 200,000 claims deposited with the court. That amounts to about 3.8 billion disbursed, which makes up approximately one half of the total set aside by BP of 8.2 billion dollars.
BP is paying from a total compensation fund of 20 billion dollars set up in 2010. But at the current rate, the money could run out by September.
The company however, is legally bound by the settlement reached with the US government to compensate people even if the funds set aside run out. The formula for application of the funds to the victims was delegated to entities outside of BP's direct involvement. That is why BP is now suing to change the formula or the way it is being applied, due to concern of cost overruns.
One of the contentions by BP is that the current formula application is forcing the oil giant to pay claims to claimants who in the company's view are not deserving of payment. They are accusing trial lawyers and politicians essentially of diverting funds to their advantage by inflating losses, or creating claims in which losses never existed.
BP is currently fighting another lawsuit in New Orleans, to settle the extent of its liabilities for the spill. The fine the government might assess will depend on how much oil was spilled and BP's direct negligence in the incident.
Source : Guardian / 7.3.13
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