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* BP estimates compensation to date at $8.2 bln
* More than 195,000 claims filed so far
By Kathy Finn
NEW ORLEANS, July 8 (Reuters) - BP Plc drew toughquestions on Monday from U.S. appeals court judges hearing acomplaint by the oil company objecting to the payment of certainclaims for damages related to the Gulf of Mexico spill, castingdoubt on BP's effort to curb the payouts.
BP has said repeatedly this year that the terms of asettlement reached with a class action set of claimants in 2012are being misinterpreted by Patrick Juneau, the claimsadministrator, allowing unaffected businesses to receive money.
Members of a three-judge panel for the U.S. Fifth CircuitCourt of Appeals in New Orleans, however, seemed skeptical fromthe start of the 45-minute hearing that BP was within its legalrights to change how claims are being paid, given that it agreedto the terms.
Judge James Dennis peppered BP's lawyer, Theodore Olson,with questions about why the company believed the appellatecourt had jurisdiction over interpretation of the settlement.
"Irreparable injuries are taking place," Olson answered. "Itis costing literally billions of dollars ... and the (lower)district court has made it very clear it does not want to hearany more arguments with respect to these issues."
The number of claims filed with the spill compensation fundhas risen by 18 percent over the last six weeks to a total of195,403, according to the claims website. Payouts began almost ayear ago and the fund will accept claims until next April.
The increase followed a period in which lawyers encouragedbusinesses and individuals to make claims for the 2010 disaster,which killed 11 men in a rig explosion.
BP's appeal seeks to stop so-called business economic losspayouts while an independent inquiry is launched.
After hearing Olson give BP's interpretation of terms of thesettlement, Dennis broke in to ask how the appeals court couldchange an agreement that all the parties signed months earlier.
"The agreement defines what is a lost profit in a particularway, and you have had a chance to not agree with that - severalchances," Dennis said. "How can we go beyond the four corners ofthe agreement?"
Olson said BP was not asking the court to go beyond theagreement but to weigh in on the interpretation of the terms.
Speaking on behalf of the plaintiffs, Samuel Issacharoffargued that it was difficult to see how the appeals court hadjurisdiction since some of BP's objections had not gone throughthe internal claims appeal process stipulated in the agreement.
Judge Edith Brown Clement asked Issacharoff about BPcomplaints of a "feeding frenzy" among claimants, including somelocated far from the coast, and he said that the company hadagreed to a "massive" claims eligibility area, "apparentlybecause BP wanted peace."
"BP understood, to its credit, that it had destroyed thebusiness environment of the Gulf," he added.
Judge Dennis, addressing Olson again after the other lawyershad spoken, said parties could not come in and change anagreement once it has been made.
The judges gave no indication of when they would rule on thematter. BP declined to comment on the hearing.
James Roy, co-lead counsel for the plaintiffs steeringcommittee, said after the hearing that he was satisfied with theproceedings, adding that it was clear "all three judgesthoroughly familiarized themselves with the record."
PAYOUT DISPUTE
Much of BP's argument against the way Juneau is making thepayouts hinges on an interpretation of accountancy terms.
Under the settlement, eligibility for business economic lossclaims is based on showing a lower revenue, higher expense, orboth, during and/or after the oil spill, compared with otherperiods.
BP's appeal takes issue with how Juneau has been calculatinglosses for claimants who do show their revenue and/or expenseswere affected by the spill.
BP has a provision of $42.2 billion in its accounts setaside for clean-up costs, fines and compensation, so the subjectof the appeal may end up a relatively small part of its finalbill. Other developments - such as being found grossly negligentby the judge in the main trial, Carl Barbier, instead of simplynegligent as BP argues - could raise its liability by much more.
However, the nature of the payments - many, small andindividual - means that unlike other future costs, recoveringthem through further litigation would be next to impossible, asBP has argued in making its case of "irreparable" harm.
In April, BP added $500 million to its best guess ofcompensation payouts under the settlement, based on what itknows so far, for a total $8.2 billion of business economic lossand other compensation claims.
BP has $1.7 billion left in the $20 billion pot it set asidefor paying these and other costs. After that is gone, BP hassaid it will take future compensation money straight from itsnet profit - which could mean a charge as early as next year ifpayments continue at the same rate until then.
