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Analysis of BP's settlement in US Deepwater Horizon oil disaster & its potential impact on future mass tort settlements

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Article
12 July 2013

'Orwellian' spill leaves BP in a bind [USA]

Author: Ed Crooks, Financial Times

When BP agreed a court settlement last year for victims of its 2010 oil spill in the Gulf of Mexico, it signed up to detailed procedures for how businesses could claim compensation for lost profits, based on records of their revenues and expenses before and after the disaster. One detail left unspecified in the settlement agreement it drew up with the plaintiff’s lawyers was the precise definitions of “revenue” and “expenses” to be used for those claims. BP and its advisers…believed the terms had such obvious agreed meanings that the…document did not need to explain them any more precisely. They were wrong. Both Patrick Juneau, the Louisiana lawyer appointed to administer claims under the settlement, and Carl Barbier, the judge who has been hearing the case, have adopted interpretations that are different from BP’s. As BP argued in the Fifth Circuit appeal court…, the result threatens to be financially disastrous. It opened the door for businesses across the gulf region to claim compensation from BP…if they suffered no harm as a result of the spill…

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Article
11 July 2013

BP, buyer’s remorse and the future of mass tort settlements [USA]

Author: Alison Frankel, Reuters

The oil giant BP has recently done a very good job of casting itself as the victim of greedy plaintiffs lawyers looking to get rich by submitting unwarranted claims for businesses that weren’t actually harmed by the Deepwater Horizon oil spill…BP went to the appeals court after U.S. District Judge Carl Barbier approved the class action administrator’s interpretation of how business economic losses should be calculated under the settlement. In the oil company’s view, Barbier and the administrator, Patrick Juneau, have essentially rewritten settlement terms to invite claims by businesses that suffered no losses attributable to the oil spill…Future defendants will learn from BP’s experience that proof of causation should be a tougher obstacle, or that definitions for even basic accounting terms must be negotiated and spelled out. [Also refers to Halliburton]

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