BP seeking lower compensation payouts from Deepwater Horizon oil spill

Oil company BP has returned to court in connection with the 2010 oil spill at its Deepwater Horizon oil rig. The company is asking that compensation payouts to those who were affected by the disaster be limited, claiming that many of the payouts have been inflated or awarded for false claims. The company has taken these claims to three federal judges in New Orleans, in an attempt to reduce all awarded compensation.

A fund was set up from which compensation payments are taken, but BP has claimed that the fund administrator, Patrick Juneau, is awarding incorrect amounts of compensation. BP has suggested that Mr Juneau's interpretation of the agreement that was put in place to handle compensation claims, is flawed; resulting in millions of dollars worth of payments being awarded to incorrect and possibly false claims.

The original amount of money earmarked for the compensation fund was around $7.8 billion (£5.2 billion), but BP has had to payout further to cover the compensation amounts being awarded by the administrator. The company has added hundreds of millions of dollars to the settlement fund already and could end up paying further billions of dollars if the federal court does not rule in its favour. BP is asking the judges to reverse the ruling - put in place by a lower court - that will result in fewer, lower payments and to place more control on Mr Juneau's actions in relation to the fund.

Mr Juneau's lawyers are arguing that BP's estimates on the number of claimants and the size of the compensation payouts were unrealistically low in the beginning. Mr Juneau has stated that he has only been doing what he was instructed to do; adding: “All I’m implementing here is what BP and its plaintiffs agreed to.”

The action that BP is asking the federal court to take will not affect the compensation claims of individuals, only businesses. The company wants stricter methods of assessing claims in place so that any money awarded accurately reflects the real damages that any businesses sustained as a result of the Gulf of Mexico oil spill.