BP facing Deepwater Horizon lawsuit from investors
07 July 2014
A group of BP shareholders have started a class action against the oil major over the Macondo disaster, where a well blowout destroyed the Deepwater Horizon drilling rig, killed 11 workers and caused millions of barrels of oil to spill into the Gulf of Mexico. Pomerantz,a New York-based law firm, is taking the case on a no-win, no-fee basis.
A total of 32 major investors are seeking financial compensation for the losses they incurred on their shares. While they had the right to take action in the High Court in London, they have taken their claims to Texas where higher awards are likely.
Shareholders suing the company include the pension funds for the London boroughs of Westminster, Kensington and Chelsea and Redbridge. Councils in Cumbria, Lincolnshire and South Yorkshire are also involved, along with other UK, European and US funds. The pension trust of rival oil group Shell is another plaintiff.
Other than the BP group, the claimants are also suing board members when the incident took place in April 2010, including Bob Dudley, the current BP chief executive, former chief executive Lord Browne and non-executives mining tycoon Cynthia Carroll, banker Douglas Flint and pharmaceuticals chief Sir Tom McKillop.
Also in the frame are Halliburton and Transocean, respectively the contractor and rig owner/operator on the Macondo well, and Cameron International, which made the well blowout preventer.
Jennifer Pafiti, a lawyer at Pomerantz, told the Evening Standard: “This is a hugely complex case and the outcome will have significant ramifications for securities litigation in the US. The fact that UK pension funds who bought stock on the London Stock Exchange can now participate in bringing claims in the US raises the prospect of recoveries where significant losses have been incurred.”
The latest wave of investors suing comes on top of a number of other UK shareholders attempting to sue in the UK who bought shares immediately after the disaster. These investors claim they would never have bought them had BP not allegedly made “misleading statements” about its safety policies and the difficulties it was having stemming the flow of oil.
A BP spokesman in London said on July 4: "All of the plaintiffs' securities claims relating to the Deepwater Horizon accident are meritless and we will continue to vigorously dispute them."
BP has already made payouts of over $30bn (£17bn) in compensation and fines following the incident and it is still facing a charge of gross negligence over the incident, which would potentially open the group to $20bn worth of new fines under the US Clean Water Act.
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