BP CEO Bob Dudley says the “biggest beneficiaries” of an agreement related to the 2010 Gulf Oil Spill disaster aren't the victims, but their lawyers.
In an interview with CNBC Tuesday, Dudley said the U.S. class-action system has become an “industry” ripe with financial incentives that make plaintiffs’ lawyers eager to bring claims. “This is not right, it’s not good for American business,” Dudley said. “It happens all the time in the US with this class action plaintiff system, which is an industry and a business model.”
The comments come as the oil giant is appealing parts of its multi-billion settlement to compensate oil spill victims, claiming that it’s being “misinterpreted” and that officials are paying out exaggerated or in some cases false claims. The victims’ lawyers have argued in response that the company is merely trying to back away from last year's agreement.
Since the company’s victim compensation fund is dwindling and any payouts that go beyond the fund will hit BP’s future profits, it's in Dudley's interest to claim lawyers are taking advantage of the settlement. But a Businessweek story from earlier this year adds weight to Dudley's central argument.
In the wake of the settlement, the magazine reported that plaintiffs' attorneys "swarmed onto the scene" to file claims for clients, who in some cases live relatively far from the site of the spill. One lawyer admitted to the magazine that he filed a claim for a client to win damages on a revenue drop that "had nothing to do with the spill."
Class-action controversies have popped up elsewhere. In one class-action suit filed in Tampa Bay, Fla., last year, the plaintiffs stood to get no money, while their lawyers could have earned up to $300,000 in legal fees, according to the Tampa Bay Times.