BP Oil Spill Settlement to Exclude Hurt Cleanup Workers

By Laurel Brubaker Calkins

Nov. 27 (Bloomberg) –- BP Plc, having pledged billions of dollars for damages caused by the 2010 Gulf of Mexico oil spill, won’t have to make payouts any time soon to more than 95 percent of the workers hurt while cleaning up the mess.

If the workers want money for their physical injuries, they’ll need to sue the company, a federal judge in New Orleans ruled yesterday, saying they no longer qualify for automatic compensation under the company’s medical-benefits settlement.

U.S. District Judge Carl Barbier expressed frustration that the vast majority of an estimated 20,000 individuals injured from exposure to crude oil and dispersants during the spill weren’t covered by a deal he thought would end such litigation.

BP, based in London, may save as much as $1.2 billion of the estimated $9.7 billion overall cost of its settlement of most private spill-damage claims, according to court filings.

All individuals with exposure-related injuries diagnosed after an April 2012 cutoff date must sue for compensation under contract provisions reserved for latent injuries, such as cancer, which might develop years after someone comes into contact with the spill, BP argued. In yesterday’s ruling, Barbier reluctantly agreed.

September Hearing

“The interpretation may not be what the court envisioned at the time” or what victims’ lawyers thought they’d negotiated, Barbier said in an eight-page ruling. Barbier, after reviewing the contract “thoroughly” and weighing arguments from both sides at a September hearing in New Orleans, said “the contract terms are unambiguous.”

Early drafts of the settlement, which provides as much as $60,700 to workers immediately diagnosed with specific physical injuries, blocked automatic payments for ailments that manifested more than two years after the spill began. In the final draft, Barbier said, the accord’s wording was altered slightly so it denied automatic compensation for ailments that weren’t formally diagnosed by a specific series of medical tests before that cutoff date.

Barbier told BP’s lawyers their interpretation was “troubling” and wasn’t what he was originally told when he signed off on the medical-benefits settlement, which is part of BP’s larger $9.7 billion deal to resolve most private spill-damage claims.

‘Rather Strange’

“It is rather strange that the court would approve a settlement,” Barbier said, repeating himself from the hearing, “that really doesn’t settle thousands of claims and requires them to file another lawsuit. I mean, it doesn’t sound like much of a settlement.”

Barbier asked for additional guidance on whether BP can interpret the settlement so that spill-exposure victims with acute injuries, who file claims for immediate compensation and sign releases not to sue, are prevented from suing if they develop cancer from their exposure to the spill years later.

BP told Barbier it believes such victims can’t sue over latent illnesses, if their ailments developed as progressions of the same injuries they sued for initially.

Lawyers for spill victims disagreed in court filings. They didn’t immediately respond after regular business hours to an e-mail seeking comment on the ruling.

The case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

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