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BP Business Economic Loss Claim Appeal 2016-1822: Professional Services Methodology Correctly Applied to Restate Financials of Zone D Law Firm


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.

Claimant is a Zone D law firm representing itself in its appeal from a threefold finding that it failed to meet any revenue causation test allowed in the Settlement Agreement.

In its one-page opening memorandum, Claimant argues that the Program vendors erroneously restated its financials by presuming that work for any particular client will smooth out over the life of the client. Had the Program not done so, posits Claimant, it would have met at least the Decline-only test , including all three of its now familiar criteria.

A de novo review of this record reflects that in analyzing Claimant’s financials, the Program vendors found four of the seven available”triggers” provided by Policy 495 for treating unmatched claims. In furtherance of this court-mandated Policy, the vendors then restated Claimant’s financials utilizing the Professional Services methodology, which was appropriate under Policy 495 given the 541110 NAICS code assigned to Claimant and which Claimant itself used in its tax returns and in its Program claim form. Once the financials were restated using that methodology, Claimant simply failed to qualify under any revenue causation test, including the Decline-only test. There was no error in the actions of the Program in this case, and the claim was properly denied under the terms of Policy 495.

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