BP accuses lawyer of inventing plaintiffs

KEVIN MCGILL
Last updated 09:00 27/02/2014

Relevant offers

World

Ellen Pao launches appeal in Silicon Valley gender bias case Police officer stands in for dead parents at teen's graduation Nigerian central bank officials arrested in alleged $56 million scam Carl's Jr Thickburger ad aims to be Most American Ever Google still struggling to hire more than white or asian male workers KFC sues over eight-legged chicken rumours Malaysia Airlines CEO says carrier is bankrupt Google reveals trump card to build new headquarters in California Gina Rinehart saga has more twists to come Average cost of data breaches now at $5.2 million a year for companies, study says

A federal judge on Wednesday delayed a lawsuit against a Texas lawyer accused by BP of falsely claiming to represent thousands of deckhands who lost money in the 2010 Gulf oil spill.

US District Judge Carl Barbier agreed that the lawsuit should be put on hold, at least temporarily, while the criminal case against attorney Mikal Watts is ongoing. Watts' lawyer said Watts expects to know by June whether he will be indicted.

Barbier also heard arguments on whether he should halt future distribution of money from a US$2.3 billion ($2.8 billion) fund for seafood industry workers until the court can determine the extent of the alleged fraud. It wasn't clear when he might issue a ruling.

BP claims that more than half of the Social Security numbers on Watts' client list were fake.

The oil giant argues the money it agreed to put into the seafood compensation fund was inflated, based on the belief that Watts - a former member of a steering committee of attorneys representing plaintiffs suing over the oil spill - represented more than 40,000 clients.

BP said it has already paid out more than US$1b from the fund under a two-tiered payment plan.

Under the settlement, a second round of claims and payments was to begin if there was money left over after the first round, according to BP court filings.

The date for the second-round payments has not been set. Barbier noted it was likely months away.

There should be no second-round payments until the fraud allegations against Watts are more fully investigated, BP attorney Kevin Downey said.

Jim Irwin, attorney for the class suing BP and others over the oil spill, said it was BP's duty to investigate whether claims were legitimate.

And people who may be due legitimate payments should not have claims delayed or denied because of allegations against Watts, he said.

"Proper restitution is to go after the people who committed the fraud," Irwin said.

Although BP has publicly raised questions about the validity of some seafood industry claims, the focus of Wednesday's hearing was not specific fraudulent claims that may have been paid out.

Ad Feedback

- AP

Special offers

Featured Promotions

Sponsored Content