BP court appeal over Deepwater compensation rejected

The Deepwater Horizon explosion in the Gulf of Mexico killed 11 people

Oil giant BP has suffered a setback in its attempt to limit payouts over the 2010 Gulf of Mexico spill.

A US court has refused to reconsider its decision that firms do not have to prove they were directly harmed by the oil spill to get settlement payouts.

It means the compensation claims process, which has been suspended since a separate court ruling in December, should now be able to resume.

BP said it was "disappointed" by the decision and mulling its legal options.

It had argued at an earlier court hearing that some firms had filed fictitious spill claims.

The 5th US Circuit Court of Appeals in New Orleans voted 8-5 against BP.

Legal battle

The court hearing was the latest in a long series held to determine who BP owes money to following the largest oil spill in US history.

The oil giant will now have to decide whether to progress to the next legal stage, and take its case to the US Supreme Court.

The explosion on the Deepwater Horizon oil rig four years ago killed 11 workers, and pumped millions of gallons of oil into the Gulf of Mexico.

In the latest ruling, Judge Leslie Southwick stated that a 2012 policy statement, issued by the court-appointed claims administrator and developed with "input and assent from BP," clearly spelled out the criteria for business compensation claims.

Mr Southwick said all parties agreed to the relevant criteria, before court approval of that 2012 settlement deal.

But Judge Edith Brown Clement said the latest court ruling made the court party to "fraud" and "could funnel BP's cash into the pockets of undeserving non-victims".

BP said in 2012 it would put aside about $7.8bn to resolve the compensation claims.