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BP Business Economic Loss Claim Appeal 2015-1854: Trigger requires use of Policy 495


The following is an Appeal Panel Decision issued pursuant to Section 6 of the BP Deepwater Horizon Economic & Property Damages Settlement Agreement and the Rules Governing the BP Appeals Process. Links may have been added to assist the reader. The original decision may be found here, as well as a glossary of BP Settlement terms.

BP appeals a BEL award of $61,630.32 (pre-RTP) to a Jackson, MS. Employment background screener on a single preserved basis, claiming that the Program vendors erred in failing to apply the AVM methodology in computing the award. Specifically, BP avers (and Claimant admits) that Criteria 6 of Policy 495 was triggered (“…when variable margin percentages compared between any two months included in Benchmark year(s) and Compensation year vary by more than 50 percentage points.”)

Herein, such a variance exceeded 50% (if only by the barest of margins of less than 1%) on at least two relevant occasions. As pointed out by BP, Policy 495 states that if any of the criteria indicating insufficient matching is triggered, “…the claim shall be identified for further matching analysis.” Herein, no such identification was made.

Although this panelist respects the professional judgment granted to the Program accountants under Policy 495, it feels that the language requiring “identification for further matching” upon triggering of any of the insufficient matching criteria would be undermined if it were not applied even in very close situations such as the present. As such, there is a finding that the AVM methodology should have been used upon triggering Criteria 6 of Policy 495. Since Claimant’s counsel did not contest the mathematical computation submitted by BP as to the difference the AVM methodology would have made, pre-RTP, in the award, BP’s proposal of a $14,996.00 pre-RTP reduction in the award (to $46,634.00) is hereby chosen.

[Editor’s Note: But see Appeal 2015-1743Appeal 2015-1682 and Why Policy 495’s seven volatility screens are not conclusive of insufficient matching.]

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