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Legal Battle Over Questionable Oil Spill Claims Just Getting Started

June 22, 2015
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In the wake of the 2010 Deepwater Horizon oil spill, BP agreed to a settlement to resolve claims of private economic loss, and estimates that it may cost as much as $10.3 billion dollars.

It’s one of the largest legal settlements in history, and some say BP agreed to it with the best of intentions, as a way to bypass the years-long lawsuit system and repay victims of the oil spill quickly.

While the agreement has allowed many legitimate claims to be paid efficiently, it also also opened the door to an alarming number of questionable claims that BP says are based on fraud.

Now, as the deadline for filing trust claims comes to a close, a federal appeals court has given BP an important right to appeal those claims that, it says, are based on pure fraud.

Such as: A Louisiana man receiving $238,000 after falsely claiming his 2009 income came from shrimping — rather than his job as a mechanic.

Or, the discovery of seven claimants— two whom were clients of a single New Orleans plaintiffs’ firm – who falsified their tax returns in order to receive hundreds of thousands in settlement cash.

The questionable settlement claims and outright fraud have been so extensive that BP created a Web site — StateoftheGulf.com — to document and combat these abuses.

BP also turned to the courts.

In May 2015, a U.S. federal appeals court ruled that BP has the right to appeal individual claims that for any reason look suspect because of possible fraud or because the award was too high.

The appeal right is an important tool, BP says, in ensuring that those dollars go to true victims. And, with 63,000 claims already, and the rush of perhaps thousands more before the filing deadline — the legal battle is just getting starting.

And it will be up to the courts to decide just how much opportunistic plaintiffs’ lawyers have corrupted a good faith effort by BP to compensate legitimately harmed victims of the biggest oil spill in U.S. history.

The appeal right is an important tool, BP says, in ensuring dollars go to true victims.

The legal battle is just getting started.

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