The third anniversary of the BP oil spill is tomorrow, April 20th, and much remains uncertain about the ultimate cost of the disaster. Environmental damage is still being assessed and, given the amount of oil and chemical dispersants injected into the ecosystem, it might be years before scientists truly understand the lasting damage that the Deepwater Horizon spill caused.
Financial damage would appear to be much easier to estimate, though recent court battles between BP and others have clouded the monetary picture as well. Despite three years of efforts and a signed settlement agreement that was meant to resolve a large private class action, BP still does not have a firm grasp on how much money it will be forced to pay out for the damage it caused to the Gulf Coast.
Last year BP agreed to pay $4 billion in criminal penalties to the federal government as well as an estimated $7.8 billion to settle a private class action. Since then, the number for the private settlement has ballooned upward, first to $8.5 billion and now an undetermined figure as BP says it is not able to accurately estimate the total cost of the private settlement. In addition, the company is facing continued claims by those plaintiffs not covered by last year’s settlement along with potentially $17 billion in fines over violations of the Clean Water Act.
The $8.5 billion agreement did not cover claims of financial institutions, casinos, private plaintiffs in parts of Florida and Texas, and residents and businesses claiming harm from the deep-water drilling moratorium. It also excluded federal government claims and those of Gulf Coast states Louisiana and Alabama. A recent wave of new lawsuits from groups like Florida casino workers who say their tips declined as a result of the spill or from real estate developers who say they lost millions have been filed against BP, driving up the cost of settlements outside the class action arrangement.
A big part of what the company may still owe will hinge on what Judge Carl Barbier decides regarding litigation currently before his court. Barbier must assign fault for the oil spill and determine whether BP or its contractors, Transocean and Halliburton, were grossly negligent. A decision finding gross negligence could lead to significantly higher damages and fines. The first phase of the trial came to a close on April 17th, and Barbier has said he will take time, likely 60 days, before issuing a decision.
A second phase of the trial is set to begin in September, which will revolve around the size of the spill and the efforts made to contain it. A third phase is also likely which will determine penalties. The trial is split into the separate phases to help push for a settlement. One expert says the goal is to help the parties see the light that is coming at the end of the tunnel.
In the first phase of the trial, BP pointed fingers at Transocean for failing to maintain the Deepwater Horizon oilrig and Halliburton for providing defective cementing services. For their part, both Transocean and Halliburton pointed fingers right back at BP. The issue over liability and the degree of negligence are crucial and will ultimately decide just how many more billions BP may be on the hook for.
If you’ve been impacted by this or any other oil spill, don’t hesitate to contact the Mississippi BP Deepwater Horizon oil spill attorneys at Kobs & Philley at toll free (877) 856-0330.
Source: “BP Still Uncertain Over Spill Cost at Third Anniversary,” by Margaret Cronin Fisk, published at Bloomberg.com.
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