Processing Magazine

BP calls for investigation into administrator assessing 2010 spill claims

June 25, 2013
Off-shore oil drilling platform
The cost of the Deepwater Horizon incident continues to rise for BP and others involved. (iStockphoto/Thinkstock)

BP Plc has asked for an independent investigation into a lawyer reviewing claims arising from the Deepwater Horizon oil spill in 2010, accused him of misconduct and that his actions could lead to disproportionate, excessive or fraudulent claims, the company stated.

BP presented its allegations in a letter addressed to Judge Carl Barbier, who is hearing a civil case over the oil spill in a court in New Orleans. The company described the lawyer's actions as "unethical and potentially criminal behavior." BP acted in response to a report by the Associated Press, which revealed that the lawyer had received payments from a New Orleans law firm representing one of the claimants. The lawyer in question, Lionel H. Sutton III, confirmed to CBC News in an e-mail that he had been suspended from the case as a result of an anonymous allegation. However, he claimed that he was not familiar with the nature of the allegation and declined to comment further.

Meanwhile, Patrick Juneau, the court-appointed claims administrator, announced that an internal investigation into the allegations had been started, following the lawyer's suspension.

BP is trying to block huge compensation payouts to businesses in the aftermath of the 2010 oil spill. The British oil giant argued that Juneau was not carrying out the internal investigation properly and accused him of failing to collect relevant documents and gather important data, as well as not interviewing people that could be familiar with the processes.

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Juneau was appointed as administrator by Judge Barbier last year. The judge overseeing the case has withheld his decision regarding the calculation of payments. BP has appealed and next month the case will be heard at the 5th U.S. Circuit Court of Appeals, the Financial Times reported.

BP has raised concerns that Juneau has been estimating business losses in an inadequate way, which could lead to the oil company paying much higher compensation to businesses claiming to have been affected by the spill than previously estimated. BP expected the total cost of the settlement to reach $7.8 billion but stated that this could now exceed $8.2 billion in addition to the cost it has had to face for compensating businesses whose claims Juneau has not decided yet.

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According to a statement released by Juneau, the administrator acknowledged the fact that all parties involved deserved to be treated fairly and objectively. The administrator aims to be efficient and transparent and because of that all allegations will be thoroughly investigated, he added. He stated that all claims have been processed adequately and this was proved by a recent report by an independent national auditing firm.

The spill occurred in April 2010 when the drilling rig Deepwater Horizon exploded off the Louisiana coast, killing 11 workers. Approximately 200 million gallons of crude oil were released from the Macondo well a mile under the Gulf surface. Businesses from several states were affected by the oil until the well was eventually secured in July.