Considerations in Filing a Claim in the BP Oil Spill Settlement

Deepwater Horizon

Deepwater Horizon

Please Note: The Final and Firm Deadline for filing a claim is:

June 8, 2015

For more information use the contact form at the end of this article.


The April, 2010 BP Deepwater Horizon oil spill affected nearly every industry around the Gulf of Mexico. Individuals, non-profit institutions and businesses not directly associated with the maritime or petroleum industries had decreased revenue due to the trickle down effect from declines in fishing, oil and gas production, and tourism.

Churches with congregations dependent on tourism for work had contributions decline. Gulf area non-profits that schedule fund raising efforts for when snowbirds arrive had smaller events. Funeral homes were impacted by the drop in visitors, some of whom do not return to the north in the way they traveled to the south. The damage was diverse, widespread and deep. Adversity hit well beyond Gulf shrimp boats or beach resorts.


Judge Barbier

Judge Barbier

The Lawsuits and the Settlement

Hundreds of lawsuits were filed. Most were consolidated in the US District Court for the Eastern District of Louisiana. In December, 2012, a federal judge approved a settlement to address the varied economic losses flowing from the spill. Many with claims have not pursued them.Patrick Juneau, Claims Administrator

Through August 22, 2013 213,576 claims have been filed with the court appointed Claims Administrator, Patrick Juneau. There is currently a April 22, 2014 deadline to file. Early estimates placed the number of potential claims at 800,000. If the current trend continues, there will be about 330,000. Approximately 470,000 eligible recipients may not participate.

Thousands of Eligible Claimants are Unaware of the Agreement

Many eligible businesses, non-profit institutions and individuals are unaware of the agreement and their inclusion within its terms. Unlike many class actions where notices are mailed to potential claimants, BP is not obligated to provide anyone with specific notice, leaving potentially hundreds of thousands of claims unfiled.

Common Misunderstandings of the Agreement and Its Terms

There are those who are aware of the agreement, but misunderstand the terms and as a result do not make a claim. Some of the most common:

  • Close proximity to the Gulf is required. In Florida, if a county touches the Gulf, the entire county is included.1
  • A business must be directly related to either tourism or a Gulf related activity. As the examples of churches, non-profits or funeral homes above show, this is not accurate.
  • The business must be able to demonstrate a correlation between its economic loss (as defined by the settlement) and the oil spill. This is incorrect. There are financial calculations in the agreement that determine both eligibility and compensation. These determinations are made without providing a chain of evidence between the spill and the loss.2

Concerns for Other Potential Claimants Deters Claims

There have been press reports regarding BP setting aside money for claims.3 Many good hearted people believe there is a cap on the fund and that others were damaged by the spill more than they were. In the 1200+ page settlement agreement BP agreed to pay all valid claims.4 The means a successful claim by one party does not diminish nor exclude another potential claimant. Understanding that participation in the settlement does not harm any other claimant is important to many in making a decision.

Ethical and Moral Considerations

Many have hesitated to file claims due to moral or ethical considerations. Examples include aversions to a perceived “handout” due to a belief that no damage was suffered from the spill or a distaste for lawsuits generally. Accurate information is important in arriving at decisions on such a personal basis.

Regarding the “handout” and no actual damage consideration: It may be useful to understand that the economic models utilized in the agreement were agreed to by both sides to arrive at a definition of economic damage. It is designed not to be a “handout”, but rather compensation for a loss that is demonstrated through the financial calculations.

Regarding the distaste for lawsuits: Many think lawsuits are too prevalent and should be limited. In this instance, most parties that will be compensated did not initiate the action. The agreement included them after review by a federal judge regarding fairness to BP and potential claimants.

Making moral and ethical decisions can sometimes be complex. In the instance of business and institutional decision makers, there can be many factors. Personal feelings as described are important. There may be other factors. Considerations may include the benefits of a successful claim to an organization’s mission, its employees and its customers or clients.

BP’s Part in the Process

BP makes its decisions for the benefit of its shareholders. It willingly entered into the agreement as part of its business strategy for dealing with the aftermath of the spill. A good measure of how this worked for BP shareholders can be demonstrated by the following data:

Date Closing Stock Price Company Market Value
April 20, 2010 $52.65 $166.16 Billion
June 28, 2010 $27.65 $75.55 Billion
January 29, 2013 $43.53 $137.37 Billion

The day of the spill BP was worth $166 Billion to its shareholders. As oil poured into the Gulf, the value of BP dropped over $90 Billion. A month after the settlement was approved, $62 Billion in shareholder value had been regained. Markets like certainty, and the settlement process, with its defined end date of June 8, 2015, provided that.

The managers and lawyers for BP make decisions based upon the best interests of their shareholders.5 Entering the agreement provided the desired result.

Should a Claim Be Filed?

beach closed (400x266)The damage done by the Deepwater Horizon Spill will not be known for years. BP has taken aggressive action to overcome the damage to its shareholders. BP determined that the settlement was in its best interests as part of that action. That determination left many in the Gulf area with questions of their own: “Should a claim be filed?” Each eligible decision maker is best served by developing their own informed answer.

For additional information or assistance in filing a claim:


1 The entire states of Mississippi, Louisiana and Alabama are included. In Texas, the counties of Galveston, Jefferson, Chambers and Orange are included.

2 The complex calculations were developed to consider the trickle down effect of lost economic activity in the region. The agreement was developed with economic models rather than traditional legal proof of causation. This was a novel and groundbreaking approach to a very difficult problem.

3 As any business should, and a publicly traded company with reporting obligations must, making provisions for and reporting of anticipated expenses, BP has from time to time made estimates of the costs and set aside funds. The agreement is not capped.

4 Valid as defined by the agreement.

5 This not a criticism. In fact, that is the responsibility of BP’s management: to maximize shareholder value. It is something to consider when watching the commercials the company runs about its commitment to America’s energy and to the Gulf. The statements about investment and employment are certainly true, but the reasons are to be found in the daily stock quotes. The commitment is there, but it is driven but something perhaps best described as “enlightened self-interest”.


For Further Reading



  1. […] A discussion of issues in making a decision to file a claim can be found at: Considerations in Filing a BP Oil Spill Claim. […]

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  3. […] A discussion of issues in making a decision to file a claim can be found at: Considerations in Filing a BP Oil Spill Claim. […]