BP Update – Federal Judge Rules Proof of Direct Causation Unnecessary For Claimants

On December 24, 2013, Federal Judge Carl J. Barbier, who has been charged with overseeing the ongoing oil spill litigation, ruled that, under the terms of the settlement agreement and despite its recent efforts, BP could not require businesses to provide proof of direct causation between the 2010 oil spill and their economic losses.

As part of the multi-billion dollar settlement agreement that BP reached with the PSC in 2012, BP agreed that businesses with a specific geographic “affected region,” regardless of their business type, were presumed to have experienced economic loss due to the spill. A formula was developed for determining the monetary value of said losses, which would likely follow a specific pattern.

Recently, however, BP has been trying to argue that they had been paying too many fake claims whose losses were not at all tied to the spill and argued that businesses should only be able to recover if they could prove their losses were directly tied to the spill.

In a statement, Judge Barbier wrote that requiring a “claim – by – claim” analysis would result in the types of delays that the Settlement is designed to avoid, explaining that the Settlement itself was an “efficient and economically appropriate method of determining causation.”BP has appealed Judge Barbier’s ruling.