Yahoo Finance BP Trial Begins Over 2010 Gulf Oil Spill
A high-stakes trial is underway to determine how much more BP (LSE: BP.L - news) and other companies should pay for the United States' worst offshore oil spill.
Attorney Jim Roy, who represents individuals and businesses hurt by the spill, said BP executives applied "huge financial pressure" on drilling managers to "cut costs and rush the job" before a blowout triggered an explosion that killed 11 workers and spawned the massive spill.
Mr Roy said the project was more than $50m over budget and behind schedule at the time of the blowout, and that "BP repeatedly chose speed over safety", quoting from a report by an expert who may testify later.
Unless a settlement is reached, a judge will decide months from now how much more money BP PLC and its partners on the ill-fated drilling project owe for their roles in the 2010 environmental catastrophe in the Gulf of Mexico.
BP has said it already has racked up more than $24bn in spill-related expenses and has estimated it will pay a total of $42bn to fully resolve its liability for the disaster that killed 11 workers and spewed millions of gallons of oil.
But the trial attorneys for the federal government, Gulf states and private plaintiffs hope to convince US District Judge Carl Barbier that the company is liable for much more.
Fordham University law professor Howard Erichson said: "In terms of sheer dollar amounts and public attention, this is one of the most complex and massive disputes ever faced by the courts."
Judge Barbier has promised he will not let the case drag on for years as has the litigation over the 1989 Exxon Valdez spill, which still has not been completely resolved.
He encouraged settlement talks that already have resolved billions of dollars in spill-related claims.
In December, Judge Barbier gave final approval to a settlement between BP and Plaintiffs' Steering Committee lawyers representing Gulf Coast businesses and residents who claim the spill cost them money.
BP estimates it will pay roughly $8.5bn to resolve tens of thousands of these claims, but the deal does not have a cap.
The oil giant also resolved a Justice Department criminal probe by agreeing to plead guilty to manslaughter and other charges and pay $4bn in criminal penalties.
Transocean (NYSE: RIG - news) reached a separate settlement with the federal government, pleading guilty to a misdemeanour charge and agreeing to pay $1.4bn in criminal and civil penalties.
But there is plenty left for the lawyers to argue about at trial, given that the federal government and Gulf states have not resolved civil claims against the company that could be worth more than $20bn.
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