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BP Business Economic Loss Claim Appeal 2016-101: CPA firm properly treated under AVM, not professional services


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 this BEL award to a CPA firm on the grounds that the Settlement Program should have applied the Professional Services Methodology rather than the AVM Methodology.

Policy 495 governs this appeal. Under 495, the Settlement Program assigns a NAICS Code to the Claimant. Ordinarily, this code will determine which methodology is applied to the Claimant (assuming that the Settlement Program determines that a matching problem exists). In the instant matter, Claimant was assigned a code that falls under the Professional Services Methodology.

However, footnote 9 of Policy 495 states that:

“A claimant with a given NAICS code will not automatically be assigned to a given methodology by virtue of the NAICS code if, in the judgment of the Claims Administrator’s office, there are factors that indicate that revenues and expenses would be more sufficiently matched by applying an alternative methodology. As a result, such businesses within a certain three-digit NAICS Subsector may be treated under a different methodology from others within the same Subsector.”

Thus, the Settlement Program has the discretion to apply the methodology that bests accomplishes the purposes of Policy 495.

Here, the Settlement Program applied the seven matching criteria, a number of which were triggered. The record shows that the Settlement Program inquired into these triggers, after which the Settlement Program concluded that the AVM methodology would best address the matching issues.

This Panelist has reviewed the record and is satisfied that the Settlement Program did not abuse its professional judgement. Consequently, Claimant’s Final Proposal is adopted.

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