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BP Criminal Settlement Could Mean Tough Sledding in Its Future Cases

November 16, 2012 09:41:37 am
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BP's criminal settlement in the Deepwater Horizon oil spill could work against the company in the other cases it faces. says the Houston Chronicle. The settlement did not resolve government claims under the Clean Water Act and the Oil Pollution Act, which could run as high as $21 billion if BP is found to have committed gross negligence. In Thursday's settlement, BP admitted it was responsible for the deaths of the 11 Deepwater Horizon crewmen in the April 20, 2010 accident. It’s going to be hard for BP to argue it wasn’t grossly negligent when it’s accepted blame for that loss of life. BP also acknowledged, after 2½ years of denial, that it misled the government and the public about the rate at which oil was flowing from the damaged well after the blowout.

BP’s legion of lawyers is no doubt arguing over every number, as they so often do, but the criminal settlement has given them less room to maneuver. All of which would indicate the environmental fines are likely to run toward the high end of the scale. Meanwhile, the admissions in Thursdays settlement can help numerous other cases pending against BP, from those of the states affected by the spill to shareholder litigation from BP’s own investors. About $500 million of the $4.5 billion in fines that BP agreed to pay was to settle claims by the Securities and Exchange Commission that BP misled investors trying to assess BP’s potential liability. BP's stock barely reacted to the news, not because investors thought the fine was too much or too little, but because the nature of the settlement means the disaster will continue to linger over BP.

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Posted by Willian
Thursday, November 22, 2012 05:29

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