Oil Spill Lawsuits Begin, Could Cost BP Billions in Damages

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Even before the massive Gulf oil spill has been cleaned up—or even contained—a wave of lawsuits, both individual and class-action, is already threatening BP, which operates the still-gushing Deepwater Horizon drilling rig.

Louisiana fishermen whose livelihoods are threatened, Florida condominium owners and restaurateurs along the coasts of several states are among those expected to bring suit against the petroleum giant. Others who may become embroiled in legal battles include subsidiary and contractor companies that played a part in the environmental disaster, including the beleaguered oil service corporation Halliburton, and even the federal government.

According to BP’s top lobbyist, the company has already paid $350 million in cleanup, containment and relief well costs, in addition to $3.5 million in damages. That number is expected to surpass the $75 million cap on compensation payouts set by the Oil Pollution Act of 1990.

Said Mark Salt, a spokesperson for BP, “We believe it is inevitable we will spend more than the OPA suggests settling claims and are willing to do that.”

The disaster began on April 20, when an oil rig explosion killed 11 people and sent over 3.5 million gallons of oil into the Gulf of Mexico. Since then, the oil has been moving steadily towards the shorelines in Louisiana, Alabama, Mississippi and Florida, with some coastal residents reporting dead sea creatures and “blobs of oil” washing up on shore.

Since the leak has not yet been contained, and there’s no telling where the oil slick will end up nor what kind of damage it might do, there’s no consensus on how much money could be lost by those who fish the Gulf, or who operate hotels, restaurants, golf courses and other recreational enterprises.

At least one BP shareholder has filed a lawsuit against the company, and numerous lawyers have set up temporary shop in the Gulf region. Earlier this week, BP filed paperwork requesting that more than 70 lawsuits be consolidated and heard by a Houston-area judge—whom the company likely feels will be less biased than a New Orleans-based court.

Even the federal government may get in on the legal skirmishes, especially if it decided to raise the $75 million liability damages cap—some senators have already moved to introduce legislation to up the cap to $10 billion. This, says an attorney who specializes in oil pollution matters, could make it impossible for most oil companies to run their offshore drilling operations.

BP reportedly asked fisherman, who had agreed to assist in cleanup efforts, to sign a waiver that would grant them $5,000 in exchange for releasing the oil company from liability, but has since put the kibosh on this initiative after public outcry.

 

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