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BP Seeking Removal of Macondo Claims Administrator

BP plc is attempting to oust the controversial court-appointed claims administrator of the Macondo oil spill program.

The move comes one month after BP asked the U.S. Supreme Court to intervene in its battle over what and who gets paid for damages related to the 2010 well blowout in the Gulf of Mexico (see related story; Daily GPIAug. 4). BP has contended for more than a year that the payout criteria has been misinterpreted by administrator Patrick Juneau and is substantially higher than projected costs. Some problems were found during an investigation by former FBI Director Louis Freeh last year (see Daily GPI Sept. 10, 2013).

U.S. District Court Judge Carl Barbier, who is overseeing the multidistrict litigation, was asked by BP on Tuesday to remove Juneau as administrator of the court-supervised settlement program (CSSP), which he has run since the start of 2012.

"New evidence reveals that Mr. Juneau had a disqualifying conflict of interest at the time he was appointed as claims administrator," advocating for claimants as a lawyer before the Gulf Coast Claims Facility in 2010 and 2011, BP said. Because Juneau had a conflict of interest, as a matter of law, "it was his obligation to get a written waiver for this conflict. He neither sought nor received one."

Juneau "purported to make disclosures over time that were ambiguous and incomplete, and are epitomized by his statement in August 2013 to Judge Freeh that he 'didn't have any involvement in anything in the spill [and] didn't represent any claimants in the spill.' In a moment, he went from being an advocate for claimants to an adjudicator of their claims, not the 'neutral' that this position requires. This calls into question Mr. Juneau’s ability to carry out his duties and creates an unacceptable appearance of bias."

Because he leads the CSSP, Juneau has adopted positions on compensation protocols, documentation requirements and release language "that deviated from the settlement agreement and mirrored positions he took on behalf of his prior clients," BP claimed in its argument.

Juneau, who is paid more than $3.4 million a year to run the program, also has presided "over a shockingly inefficient process," according to the producer. "Over the past two years, operational costs have totaled $1 billion -- that's $10,000 in costs for each claim that has received an eligibility notice, while hundreds of thousands more claims still remain to be examined."

In addition, BP said Juneau has "demonstrated a profound lack of leadership by failing to prevent the rampant misconduct that flourished in the claims facility and ultimately led to the termination or resignation of multiple top-ranking members of his staff."

The CSSP's work "is too important and Mr. Juneau's failures are too numerous to allow him to continue in his position," said BP. "In order to restore the integrity of the claims program, the court should replace him."

There was no comment from the bench, nor from Juneau's office.

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