BP Will Not Rely on OPA’s Liability Cap

NEW ORLEANS Attorneys for BP raised some eyebrows during Friday’s MDL hearing when they said they would need to confirm with their client whether BP would rely on the Oil Pollution Liability Act’s $75MM liability cap.  But the defense attorneys have made it clear in yesterday’s filing with the court.

“BP consistently has said it would pay all legitimate claims, regardless of the OPA statutory limit of liability. To this end, BP already has paid claims many times over the OPA limit and will live up to its public commitment to pay all legitimate claims made in connection with the Deepwater Horizon incident and the resulting oil spill.  Accordingly, BP has chosen to waive the statutory limitation on liability under OPA . . .”

The statement goes on to indicate what this waiver does not mean, saying that by making the statement “BP and its affiliates are not admitting anything about their conduct and, indeed, specifically deny that they have engaged in any gross negligence in connection with the Deepwater Horizon incident and the resulting oil spill.”

Filed by BP’s attorneys Don K. Haycraft at Liskow & Lewis and Richard C. Godfrey of Kirkland & Ellis, the statement says that there are other responsible parties who have not waived their OPA rights,  but said BP “urges them” to do so.  BP will step in to pay all legitimate claims even if the others do not, but it reserves the right to pursue them for reimbursement, the statement says. BP has reportedly paid out $1.4BB.

Ervin A. Gonzalez, who is with Colson, Hicks, Eidson, Colson, Cooper, Matthews, Martinez, Gonzalez, Kalbac & Kane of Coral Gables, Fla., said the issue also was raised as to whether a claim filed with the compensation fund would be considered “presentment” under OPA.

Another attorney, and an expert on OPA, said the question around the liability cap was an “academic” and not a monetary matter for BP.  He said BP’s attorneys were expressing concern about protecting the company’s indemnity and contribution rights under its contracts with the co-lessors and the other potential liable parties such as Haliburton and Transocean.  Under its contractual arrangements with the co-lessors, they share proportionately in liability for pollution unless BP is reckless, in which case it bears the entire exposure. I think that is why their counsel hesitated in conceding that the cap  would be waived.”

In other developments at the hearing, Beasley Allen’s Rhon Jones said Judge Barbier turned down BP’s request to move trial dates.   “The court seems inclined to set OPA test cases for damages only against BP in the summer of 2011,” Jones said.  “The limitations and liability as to all defendants remained set for February 2012.”

As for whether claimants are being paid by BP, Gonzales said the feelings among claimants are mixed.  “A lot haven’t been paid, a lot feel they’ve been underpaid, a lot aren’t happy with all the rigmarole they have to go through [in filing claims] and some are happy,” he said.   BP’s attorneys said that due to missing information 61,000 claims remain pending.

Both Jones and Gonzalez are speaking at HB’s Oil in the Gulf: Litigation & Insurance Coverage Conference Nov. 4-5, 2010, in Miami.  CLICK HERE for more information.