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BP Claim Appeal Library Updated

As of the latest report available from the Claims Administrator (April 27, 2017), BP has appealed 9,152 claims. This represents a BP appeal rate of approximately 21%. Claimants have appealed 5,935 claims (either appealing outright denials or contesting the amount awarded). Of the BEL appeals that have been resolved, the Claimant has persuaded the Appeal Panelist(s) to increase the award amount in 140 instances, while BP has succeeded in lowering the amount in 1,816 claims. In 3,053 instances the amount awarded has remained the same post-appeal. 1,240 outright denials were upheld, while 197 were reversed in favor of the Claimant. You may read some of the more recent appeal decisions here.

In June 2017 our firm made the strategic decision to limit new appellate representation in BP matters to those businesses with claim values exceeding $500,000.

BP Deepwater Horizon Claim Policy 495 Gutted by 5th Circuit

A few weeks ago the United States Court of Appeals for the 5th Circuit ripped the heart out of Policy 495’s claimant-unfriendly “matching” methodology. Specifically, the Court held that certain specialized formulas, those used to “match” the “unmatched” profit and loss statements of entities in the construction, professional services, education and agricultural industries, ran contrary to the plain terms of the Settlement Agreement. In addition, the Court opined that any movement of revenue from one month to another – “smoothing” – also contravened the Settlement Agreement. Revenue reallocation can be particularly troublesome for claimants, as Exhibit 4B’s causation tests are rooted in monthly revenue patterns. Take some sales out of one month and move or “smooth” them into another and you can fail causation in a New York minute.

Tragically, the nefarious aspects of Policy 495 which were rejected by the 5th Circuit were used to the detriment of claimants for over three years. Who knows how many economic loss victims received nothing due to this misapplication. Worse, most if not all of those whose claims were wrongfully denied (or values diminished) under this nefarious policy are likely out of luck (unless they preserved their appellate rights – which, for practical reasons, few did).

Policy 495 was originally concocted after BP successfully argued to the 5th Circuit that the original formula found in Exhibit 4C of the Settlement Agreement could lead to inflated awards, or as BP put it, “absurd” results. While the plaintiffs certainly disagreed with such hyperbole, the result was an 80+ page addendum to the Settlement Agreement (a.k.a. Policy 495) which attempted to implement the 5th Circuit’s earlier directive. Now it appears that Policy 495 was an unfortunate overreach.

Last week Judge Barbier entered an Interim Order requiring that any claims pending in the internal appeals process which were subjected to the offending Policy 495 construction, professional services, agriculture or education methodologies (or where revenues were moved short of error) be remanded to the Claims Administrator for treatment under the standardized Policy 495 methodology (annual variable margin – AVM). Impacted claimants should ask their counsel how treatment under AVM versus the specialized formulas will impact their claim’s value.

Finally, BP, disappointed with the 5th Circuit’s ruling, has asked that body for a rehearing. It is this attorney’s opinion that BP is barking up the wrong tree in that request. Of course, stranger things have happened in this unprecedented litigation.

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