Federal judge rejects British Petroleum's challenge to $7.8 billion settlement

A US federal judge has rejected a bid from BP to require companies prove their losses are directly linked to the 2010 massive Gulf of Mexico oil spill before getting a payout.

The British energy giant last year reached a $7.8 billion settlement with thousands of people and businesses hit by the worst environmental disaster in US history.

But it has been challenging the way Patrick Juneau, a court-appointed administrator of claims, calculates companies' compensation for lost profits.

BP has said Juneau's methods led to payouts that were too large or improper and that because of this, it could no longer estimate how much it would have to pay out.

In the appeal, BP argued that some companies asking for payouts should have to show additional proof that their losses were directly linked to the oil spill.

Payments were frozen in October by an appeals court in New Orleans, pending a review by District Court Judge Carl Barbier.

But in his decision dated Tuesday, Barbier said the settlement negotiated with US authorities and accepted by BP presumed an oil spill link for any losses to businesses within certain geographical zones and in certain sectors.

Supplemental proof would not just be "clearly inconsistent with its previous position, it directly contradicts what it has told this Court regarding causation," he wrote.

He also emphasized that "the delays that would result from having to engage in a claim-by-claim analysis of whether each claim is 'fairly traceable' to the oil spill … are the very delays that the settlement, indeed all class settlements, are intended to avoid."

But the judge did ask the claims administrator to review in part his methodology and to define a protocol for when "the claimant's financial records do not match revenue with corresponding variable expenses."

On April 20, 2010, an explosion on the Deepwater Horizon rig some 80 kilometers (50 miles) from New Orleans killed 11 workers and spilled oil for 87 days until it was plugged.

The disaster blackened beaches in five states and crippled the region's tourism and fishing industries in a tragedy that riveted the United States.

[Image via Agence France-Presse]