BP stops payments to spill victims until court papers clarified

City A.M. Reporter
BP's $20bn (£12.7bn) oil spill fund has halted payments to eligible victims until a US federal court clarifies an order issued in December, according to a notice posted on the fund's website.

The US District Court for the Eastern District of Louisiana had asked the fund, called the Gulf Coast Claims Facility, to pay into a court supervised escrow account 6 percent of the gross settlement amount. The funds from the escrow account would be used to meet certain legal expenses incurred by the plaintiffs' lawyers.

In a letter to the court, a lawyer for the fund, David Pitofsky, asked the court to clarify whether the ruling would mean that those who have already been paid by GCCF on or after November 7 should be asked to give some of the money back.

"Effective December 30, the GCCF has temporarily frozen all payments to claimants and the issuance of any payment determination letters," Pitofsky said in the letter.

The fund, which was set up following the April 2010 oil spill in the Gulf of Mexico, has paid $6.14 billion to individuals and businesses as of December 1. Including payments to governments for advances and claims, the fund has paid or approved for payment a total of $7.71 billion, according to a report on the BP website.