BP and spill settlements: Deepwater, deep pockets A RICE mill around 40 miles (64km) north of Louisiana's Gulf Coast received $21m. A construction firm in northern Alabama that does no business along the Gulf Coast got $9.7m. They obtained those payouts from a settlement fund set up by BP to compensate businesses harmed by the Deepwater Horizon oil spill in 2010 - yet both businesses did better in that year than in previous ones. On July 8th BP argued to a federal appeals court that these awards, and many others like them, stem from a misinterpretation of the settlement's compensation formula. It is supposed to reimburse businesses for "loss of income, earnings or profits suffered" as a result of the oil spill. To determine damage the settlement asks businesses to compare the variation in a crude measure of profit - revenue minus corresponding expenses - between three or more consecutive months from May to December 2010 (the spill began on April 20th) and a "benchmark period," for which a claimant may choose either 2009, the average during 2008-09 or the average in 2007-09. BP says that Patrick Juneau, the claims administrator, has not kept to commonly understood definitions of revenue and expenses, and instead has allowed businesses to use self-recorded cash inflows and outflows that do not necessarily represent "revenue actually earned during that period or expenses that actually correspond with that revenue." BP contends that this has led it to pay "hundreds of millions of dollars - soon likely to be billions - for fictitious and inflated losses." In its first-quarter results BP said that "no reliable estimate can be made of business economic-loss claims" and noted that total settlement costs will be "significantly higher than the current estimate of $8.2 billion." The legal profession has had a field day with the settlement. Kevin McLean, a lawyer from Tampa, sent a letter to potential clients saying: "The craziest thing about the settlement is that you can be compensated for losses that are UNRELATED to the spill." His website states: "A Tampa dentist or Dade City print shop with a dip in 2010 revenue may qualify [for a payout] even if the dip had nothing to do with the BP oil spill." BP sources, using data from the settlement programme, note that the rate of claims is running at a higher level this year than last, and that an increasing share of those claims comes from regions farther away from the Gulf Coast. However, plaintiffs" lawyers point out that a district court had approved Mr Juneau's interpretation of the settlement's terms. They argue that BP was well aware that its compensation formula could lead to payouts for losses unrelated to the spill. Mr Juneau's special counsel raised this possibility before the court approved the settlement last December, but BP had accepted it as "an inevitable concomitant of an objective, quantitative, data-based test." At Monday's appeal Ted Olson, arguing for BP, said this and other evidence offered by the plaintiffs did not prove its awareness of the "systematic, systemic problem [that] had infected the process." Some reckon BP should not have let its eagerness to stanch the flow of bad publicity lead it to sign an uncapped and easily exploited settlement. Louisiana, after all, is famously plaintiff-friendly. Such worries grew after an unnamed accuser said a lawyer working for Mr Juneau had tried to influence a claim from a law firm which, before he joined the team, had paid him a cut of claims he had referred to it. A judge has appointed Louis Freeh, a former FBI chief, to investigate the accusations. Mr Juneau has welcomed the inquiry, and claimants" lawyers say they believe that any impropriety, "if confirmed, will prove to be an isolated incident." The question now is whether the appeals court will want to wade into a battle over accounting terminology, given that the lower court has already approved Mr Juneau's interpretation. If not, BP, which has already paid $14 billion in clean-up costs and $11 billion in claims, may have to keep its wallet open a while longer.