Yesterday, an appeals court began review of BP's multibillion-dollar settlement to Gulf Coast residents and businesses harmed by the 2010 oil spill. BP is now objecting to last year's settlement for fear that it might have to pay billions more than they planned over false or exaggerated claims. The case is now being heard in the 5th U.S. Circuit Court of Appeals.
Thousands of payments amounting to nearly $4 billion dollars have already been paid, but many thousands more are expected to file claims in the near future, this is because the settlement has no cap. When BP agreed to the settlement last year, their original estimate was that they would pay a little less than $8 billion. Now, with the increase in claims by businesses that aren't over yet, BP says that they can no longer give an accurate estimate of how many billions of dollars this deal will cost.
BP is not appealing the deal because of a concern over individual's claims, but exclusively disputing the money the deal gives to businesses. Businesses, not just Gulf businesses, that were affected negatively by the 2010 oil spill can claim compensation based on a comparison of profits before the spill and after the spill. BP agreed to make up the difference with the money provided in this settlement, but their fear is that many businesses are manipulating their profit/loss margins for "easy money."
Last month, a separate panel of the 5th Circuit made a ruling that BP claims "must be corrected." According to a spokesman for the London-based oil giant, if this ruling is not corrected by the appeals court then the settlement should be closed. This is not BP's desire or intention, according to the spokesman. BP says that their goal still is to benefit individuals and businesses that suffered legitimate financial losses because of the spill.