> Region: North America > Category: Lawsuits > Source: The Times

BP's Litigation-Spill

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It's not just spilling oil that BP has on its mind - it's lawsuits, of course

Down in the Gulf of Mexico, BP is not just fighting to contain the massive oil leak from the explosion on the drilling rig Deepwater Horizon. It is also trying to absorb a build-up in litigation that is threatening to come ashore and overwhelm the courts — possibly on both sides of the Atlantic.

Already controversy has ignited, because of links between the Texas judiciary and the oil industry, over which judge should deal with the pretrial matters. It is clear that the complexity of the legal challenges — which range from the tragedy of 11 deaths in the original explosion to the possible compensation claims of hamburger-stand concession holders on the beaches of Florida — mirror the scale and complexity of the physical clean-up.

Meanwhile, in his attempt to pacify his myriad US critics, Tony Hayward, the chief executive of BP, has been giving assurances that the company will do everything necessary to fund the emergency operation and to compensate victims — or their families — for losses whether of life or livelihood.

Although BP is being portrayed (somewhat cynically) by US politicians as a British company, the reality is that it is listed jointly on the New York and London exchanges and is genuinely Anglo-American. That may be why it is going massively farther than it need do legally.

“Under the Oil Pollution Act 1990 — the US legislation that governs these cases — BP’s liability would be capped at $75 million (£52 million) unless it was found guilty of gross negligence, a failure to take part in the clean-up or wilful misconduct,” says Tony Concagh, of Stephenson Harwood, who is very familiar with the US oil scene. “Although BP has come in for a lot of criticism it might be difficult to establish any of these.”

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