29 Aug 2013

Attempt to suspend BP compensation payments lost

10:14 am on 29 August 2013

BP has lost a second attempt to suspend compensation payments over the 2010 Gulf of Mexico oil rig disaster.

The company has said that fraud and false compensation payments are behind the escalating costs it faces.

But Judge Carl Barbier ruled that there was no "credible evidence of fraud" or that the compensation process was tainted by conflicts of interest.

BP said it continued to believe that the compensation system was being abused.

The BBC reports former FBI director Louis Freeh is investigating accusations of misconduct in the claims programme.

BP insists that the payouts should be suspended while Mr Freeh carries out his inquiry.

The Deepwater Horizon oil rig explosion killed 11 workers and released an estimated four million barrels of oil into the Gulf of Mexico.

BP set up a compensation fund, initially estimating the cost of the settlement at $US7.8 billion. The company has since raised the estimate to $US9.6 billion.