A US federal appeals court has upheld a multibillion-dollar settlement between BP and coastal residents and businesses hit by the company’s massive Gulf of Mexico oil spill in 2010.

The British energy giant had reached a $7.8-billion settlement in 2012 with thousands of claimants hit by the worst environmental disaster in US history.

But it had been challenging the way Patrick Juneau, a court-appointed administrator of claims, calculates companies’ compensation for lost profits.

The 5th US Circuit Court of Appeals had yesterday ruled that US District Judge Carl Barbier was correct in rejecting a BP bid to require companies to prove that their losses were directly linked to the spill before getting a payout.

The plaintiffs were quick to hail the decision.

“Today’s ruling is an enormous victory for the Gulf, and an important step forward in ensuring that every eligible claimant is fully compensated according to the objective, transparent formulas spelled out in the settlement agreement that BP co-authored and agreed to,” lawyers Steve Herman and Jim Roy said in a statement.

BP did not immediately respond to requests for comment.

In its 48-page decision, a divided three-judge panel of the appellate court said that it could not agree with the arguments raised by BP and other appellants.

A divided three-judge panel of the court said in its 48-page ruling that it could not agree with the arguments raised by BP and other appellants and affirmed Barbier’s initial ruling in 2012.

“We cannot agree with the arguments raised by the objectors or BP,” the document read, citing federal rules governing class action lawsuits.

“Neither class certification nor settlement approval are contrary to Article III in this case,” it added, referring to federal law.

One of the judges, Emilio Garza, disagreed.

“Whether a class member was economically injured is immaterial if that loss was not caused by the oil spill,” Garza said in a 14-page dissent.

“Absent an actual causation requirement for all class members, Rule 23 is not being used to simply aggregate similar cases and controversies, but rather to impermissibly extend the judicial power of the United States into administering a private handout programme.”

In December, Barbier said the 2012 settlement negotiated with US authorities and accepted by BP presumed an oil spill link for any losses to businesses within certain geographical zones and in certain sectors.

(This article was published on January 11, 2014)
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