"The biggest beneficiaries that I can see broadly are plaintiffs' attorneys themselves, who are not just collecting fees on behalf of claims that have been submitted but also their own firms which are submitting large claims," Bob Dudley said on Tuesday. 
 
 His comments came on the day BP said its $20 billion oil spill compensation fund has almost run out, after provision for costs leaped by $1.4 billion in the second quarter. 
 
 The British oil company has just $300 million left in the fund, and the deadline to file an economic loss claim among Gulf coast businesses - which make up the bulk of claims - is not until April next year. 
 
 
 
 BP has said claims beyond what the fund can pay will be taken straight out of future profits. The company has also increased its overall provision for the Gulf of Mexico oil spill to $42.4 billion from $42.2 billion. 
 
 BP shares fell 4.5 percent in London on Tuesday morning, before recovering to close around 3.4 percent lower. 
 
 Dudley said BP had no problems with paying for "legitimate" claims but that the agreement with the U.S.Department of Justice that allowed people to claim for compensation was being mis-interpreted. 
 
 
 
 "This is not right, it's not good for American business... that's why we're vigorously protesting it. It happens all the time in the U.S. with this class action plaintiff system which is an industry and a business model." 
 
 (Read more: Halliburton pleads guilty to destroying Gulf spill evidence) ||||| BP on Tuesday accused a Texas lawyer of fraudulently driving up its settlement costs in the 2010 Gulf Coast oil spill by claiming to represent tens of thousands of clients who turned out to be “phantoms.” 
 
 In a lawsuit filed in Federal District Court in New Orleans, the oil giant, which has been fighting the administration of a settlement with plaintiffs in the courtroom and in the news media, claimed that it relied on the client count supplied by the lawyer, Mikal C. Watts, in 2010 when it put $2.3 billion into a special compensation program for the seafood industry. The company, citing “brazen fraud,” is asking the court to allow it to stop payments and reclaim some of the unspent money. 
 
 The more than 40,000 deckhands claimed as clients by Mr. Watts constituted nearly 80 percent of the people projected to file claims under the program, the company said in court papers. 
 
 In a statement, a lawyer for Mr. Watts, Robert McDuff, called BP’s actions “another of a series of efforts to walk away from the settlement to which it agreed.” He said his client “never committed identity theft and did not defraud BP or anyone else.” 
 
 Mr. Watts, a prominent Democratic fund-raiser who is regarded as a formidable litigator, has said that his clients came through referrals from other lawyers. Mr. McDuff stated that Mr. Watts filed claims “in good faith that legitimate claims were being filed for real people.” 
 
 BP, which has paid nearly $13 billion in claims to businesses, individuals and the government so far, has paid out $1 billion from the seafood fund so far. The company said that 24,520 seafood claims were ultimately filed, and of these, fewer than 5,000 were filed on behalf of individuals. Under the structure of the fund agreed to by BP and plaintiffs’ lawyers and approved by the judge, any money not distributed to seafood workers based on their claims would be given out in a second round. The company does not argue that the workers engaged in wrongful conduct, but said the inflated size of the fund would mean an undeserved “windfall” to members of the class. 
 
 Mr. Watts ultimately filed just 648 individual crew claims through the seafood fund, BP said, and just eight have been found eligible for payment. (Seventeen are pending.) That means, the company said, that “98 percent of the Watts claimants never even filed a claim” with the program, and “96 percent of the claims that he did file have been denied.” 
 
 Mr. Watts has since filed 43,976 claims under a separate compensation program intended to address claims that had been excluded from the settlement agreement. In examining those claims, the company said it found that 40 percent of the claims used Social Security numbers that belonged to someone other than the person supposedly making the claim; 13 percent gave incomplete numbers or obvious fakes such as 000-00-0001. Five percent of the numbers belonged to dead people. “The inference of fraud is overwhelming,” the company stated in its complaint. 
 
 BP has argued for months that the claims process is rife with fraud and has paid out claims from people who had no actual losses related to the spill. The federal judge in the case, Carl J. Barbier, appointed former F.B.I. director Louis J. Freeh to investigate the allegations. Mr. Freeh found that the process itself was not corrupt, but did find incidents of conflict of interest and fraud among individual lawyers and staff members of the fund. 
 
 Since then, the company has asked the Court of Appeals for the Fifth Circuit, in New Orleans, to order changes in the way that the settlement fund is run. That court has ordered Judge Barbier to “give further consideration” to the company’s complaints; Judge Barbier has temporarily halted payments. 
 
 In July 2012, Mr. Watts hosted a $35,800-a-plate event for President Obama at his home. Judge Barbier named him to the committee of plaintiffs’ lawyers that helps run the litigation; he resigned from the Plaintiffs’ Steering Committee on March 13 this year, however, not long after Secret Service Agents executed search warrants at his San Antonio law office, a move that the Department of Justice officials suggested was related to the questions about his clients in the BP case. 
 
 Mr. Watts’s client submissions were initially challenged by Kenneth R. Feinberg, who ran the first version of the settlement office after the disaster. Concerns about the claims were first reported in an April 2011 article in The New York Times. 
 
 Lawyers for plaintiffs in the case argued that BP is using the Watts controversy as an excuse to stop payments on the much larger program that affects deserving claimants. In a statement, the lawyers, Stephen J. Herman and James P. Roy, said “the notion that the number of deckhands was the driving factor during negotiations in determining the overall amount is absurd,” and that just $130 million was allocated to deckhands. 
 
 “BP’s overreaching attempt to hold the entire seafood program hostage is part of its continuing effort to rewrite history and the settlement agreement,” the lawyers said, “and is unfair to the hardworking men and women of the seafood industry whose livelihoods were destroyed by BP’s reckless conduct.” ||||| VENICE, LA. -- The oil has mostly disappeared. And in southern Louisiana, things are finally looking normal - improbably, blessedly normal - six months after the largest oil spill in U.S. history. 
 
 But on a truly normal evening, Acy Cooper Jr. would be out shrimping. Instead, one recent night, he was staying home, as he has done more often these days. 
 
 "Why? It don't pay me to do that when they're going to pay my claim anyway," said Cooper, vice president of the state's shrimpers association. 
 
 Today, it is BP's money, not its oil, that is most visibly altering the Gulf Coast. The company has been trying - on federal orders - to protect not just the water but the way of life there. But BP's waterfall of cash has changed people's lives profoundly. 
 
 The oil company has already paid out $965 million and set aside $20 billion in a separate compensation fund. The money has been welcomed as a lifeline. But it has made the coast feel like an open-air economic experiment: Some hardworking fishermen think it's in their best interest to be idle, losing market share they will need next year. And those who haven't been paid are looking for legal and illegal ways to work the system. 
 
 Kenneth R. Feinberg, whom President Obama chose as compensation czar, says fishermen such as Cooper are wrong to believe he will pay them not to shrimp. They will be compensated for the time they couldn't fish, but "if a shrimper has the ability to earn a livelihood, there is no longer a need for an emergency payment," he said. 
 
 Across the coast, Feinberg said, people are already seeing the limits of what money - even an oil company's massive amount of money - can do to right an environmental wrong. 
 
 "I told 9/11 victims when they said, 'Bring back my wife, or my son or my daughter' - 'I can't do that,' " said Feinberg, who also oversaw compensation payouts to victims of the Sept. 11, 2001, terrorist attacks. "I can't compensate you in the gulf for a way of life that goes back 100 years. I can only compensate you for financial damages." 
 
 And keeping up with that process is proving more difficult by the day. A few weeks ago, Feinberg's fund adopted new policies that paid claims faster and more generously. The result: The rate of new claims doubled, Feinberg said. 
 
 "People see that their next-door neighbor is getting paid," he said. So they say, "Why don't we submit a claim?" 
 
 A disaster's impact 
 
 
 
 It has been half a year since April 20, when an explosion at the Deepwater Horizon rig killed 11 men. Two days later, the rig's sinking set off a gray-brown geyser of crude oil, which eventually spewed 4.9 million barrels (205.8 million gallons), about 19 times more than the Exxon Valdez spill in 1989. 
 
 Scientists are still trying to measure the spill's full impact on the gulf. Little oil remains on the water's surface, and the toll of about 6,100 birds and 600 turtles was just a fraction of the animal deaths in the Alaska spill. There are continuing concerns about what's happening on the seafloor. But it is already clear that this was not Valdez.
– BP can afford to pay the settlement for a lawsuit filed against it for the Gulf oil spill—but it shouldn't have to, says Joe Nocera in the New York Times. "BP is the best example I’ve ever seen of a company that actually tried to find a better way," he writes. "Immediately after the spill, it set up a claims process to get money into victims’ hands quickly, without having to file a lawsuit." BP has already paid out $11 billion in claims. So why was it sued anyway? Because lawyers wanted to send a message, writes Nocera: "No matter how much money you are willing to pay victims, it will never be enough to keep you out of the courtroom." After all, the lawyers have their own business model to protect. Now, he says, the people that stand to benefit are businesses that weren't actually harmed by the spill, and the lawyers themselves, who get more for every business with its hand out. "All over the Gulf, lawyers are advising clients to line up at the BP trough, and they are doing so," he writes. "But how is this righting a wrong?" Meanwhile, BP's CEO has been arguing much the same thing today, telling CNBC that its $20 billion compensation fund has been drained dry by attorneys, with just $300 million remaining. Click for Nocera's full column.