BP taking Macondo case to Supreme Court

Macondo claims suit: BP plans to take compensation case appeal to the Supreme Court

BP will take its compensation case for the 2010 Macondo spill to the US Supreme Court in the last legal recourse for the UK supermajor to avoid paying what it calls "fictitious" damages in a class-action suit.

The US Fifth Circuit Court of Appeals earlier this week shot down BP's push to modify a compensation agreement with a group called the Plaintiff's Steering Committee (PSC) after allegations of fraud emerged.

The company elected to appeal to the nation's highest court given the divided 8-5 decision on the 13-member appeals panel, in which a dissenting opinion indicated BP's arguments had merit.

"The Constitution and established class action law preclude certification of a class that includes substantial numbers of claimants who were not harmed by the spill and thus lack standing to bring suit," a company statement on Wednesday said.

"No company would agree to pay for losses that it did not cause, and BP certainly did not when it entered into this settlement.

"BP will continue to fight to return the settlement to its original, explicit, and lawful purpose – the compensation of claimants who suffered actual losses due to the spill."

BP had originally undergone detailed negotiations to hammer out a settlement agreement with the PSC, which represent fishermen, restaurateurs and business owners who claim their livelihoods were damaged by the spill.

The deal established a formula to compensate broad groups of claimants but did not require explicit proof the spill caused the harm.

But BP has tried to reverse course on the agreement as its compensation bill mounts, as well as what the supermajor considers "fictitious claims".

But courts, including the latest appellate panel, have refused to let BP off the hook for the compensation model, citing the company's agreement to the deal knowing causation was not a requirement and that some fraud was a possibility.

An unfavourable legal verdict for BP could mean an increase to the company's estimated $42.7 billion pre-tax charge for resolving spill liability.

The company also faces federal Clean Water Act penalties to be determined in the third phase of a trial due to kick off in January.

Those fines could run as high as $17 billion if the company is found to be grossly negligent.

BP maintains its appeal merits Supreme Court consideration due to implications for other class-action suits.

"If the Fifth Circuit's erroneous ruling were allowed to stand, it would fundamentally redefine the prerequisites for class membership," BP said.

"That, in turn, will surely alter the calculus for companies in determining whether to enter into class action settlements or engage in protracted litigation that would delay compensation for true victims."

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