A divided U.S. appeals court on Monday rejected BP Plc's <BP.L> bid to block businesses from recovering money over the 2010 Gulf of Mexico oil spill, even if they could not trace their economic losses to the disaster.
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By a 2-1 vote, the 5th U.S. Circuit Court of Appeals in New Orleans upheld a December 24 ruling by U.S. District Judge Carl Barbier in New Orleans, authorizing the payments on so-called business economic loss claims. It also said an injunction preventing payments should be lifted.
BP said on Tuesday it was considering its options in the wake of the decision which it said would improperly allow for the payment of losses with no connection to the spill.
The appeals court decision is a setback for BP's effort to limit payments over the April 20, 2010, explosion of the Deepwater Horizon drilling rig and rupture of BP's Macondo oil well.
The disaster killed 11 people and triggered the largest U.S. offshore oil spill.
BP has settled criminal proceedings but spill litigation in the form of a civil trial continues to hang over the company. It is two phases into a three-stage civil case, and could face fines of over $17 billion.
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It has so far provisioned $42.7 billion to pay for cleanup, compensation, legal and other costs related to the spill.
The business economic loss claims linked to the current U.S. appeal court ruling are a comparatively lesser financial issue - disputed claims totaled around $1 billion at the time of BP's last financial update in February.
"We would note that the dispute over business claims is a smaller issue in the wider context of the trial. Each $1 billion extra on claims equates to just 2 pence per share for BP," Investec analysts said in a note.
BP shares traded up 0.1 percent at 493.3 pence at 1108, lagging Britain's bluechip index which was up 1.5 percent.
U.S. District Judge Barbier had ruled that BP would have to live with its earlier interpretation of a multi-billion dollar settlement agreement over the spill, in which certain businesses claiming losses were presumed to have suffered harm.
The company argued that this would allow businesses to recover for fictitious losses, but the 5th Circuit rejected its appeal.
"The settlement agreement does not require a claimant to submit evidence that the claim arose as a result of the oil spill," Circuit Judge Leslie Southwick wrote for the majority.
Terms of the settlement "are not as protective of BP's present concerns as might have been achievable, but they are the protections that were accepted by the parties and approved by the district court," the judge added.
The 5th Circuit also said claims administrator Patrick Juneau retained the authority to root out bogus claims, without having to perform the "gatekeeping" function that BP sought.
Circuit Judge Edith Brown Clement dissented, saying the decision wrongly helps claimants whose losses had "absolutely nothing to do with Deepwater Horizon or BP's conduct."
BP spokesman Geoff Morrell said the company would consider a further appeal against Monday's ruling. It has already sought an appeal against a separate 5th Court decision which upheld the validity of the settlement earlier in January.
Steve Herman and Jim Roy, who represent the business claimants, said in a joint statement: "Today's ruling makes clear that BP can't rewrite the deal it agreed to."
A spokesman for Juneau did not immediately respond to a request for comment.
BP originally projected that its settlement with businesses and individuals harmed by the spill would cost $7.8 billion. As of February 4, it had boosted this estimate to $9.2 billion, and said this sum could grow "significantly higher."
As of Monday, about $3.84 billion had been paid out to 42,272 claimants, according to Juneau's website. (http://www.deepwaterhorizoneconomicsettlement.com/docs/statistics.pdf)
The case is In re: Deepwater Horizon, 5th U.S. Circuit Court of Appeals, Nos. 13-30315 and 13-30329.