BP could face extra $18bn in fines for Gulf of Mexico disaster after US gross negligence judgement
05 September 2014
BP could face a further $18bn (£11bn) in fines after being found guilty of gross negligence for the Macondo well blowout that killed 11 workers on the Deepwater Horizon rig and led to millions of barrels of oil spewing into the Gulf of Mexico. US district judge Carl Barbier ruled on September 4 that BP had been reckless as well as negligent.
After the New Orleans court’s decision, the firm's share price fell by 5%, wiping more than £5bn off its stock market value, despite BP saying it would launch an appeal.
The firm has already paid out or set aside in penalties or compensation more than $43bn as a result of the accident and has periodically been tipped as a takeover target in its weakened state. The judge apportioned 67% of the blame for the disaster to BP, 30% to rig operator Transocean, and 3% to cementing contractor Halliburton.
Barbier’s 153-page judgment also said BP could be liable for punitive damages from other claims, opening up the possibility that others whose interests had been damaged by the spill could yet sue. He will not rule until next year on how much oil was spilled, an important factor in deciding the full extent of BP's financial liability.
The company had earlier settled a criminal case with a $4bn fine after pleading guilty to 14 federal charges, including manslaughter for the 11 deaths, as well as obstructing Congress as it investigated the size of the spill. There was a further $9.2bn settlement with civil claimants in 2012 but the latest ruling from New Orleans is the outcome the company most feared.
The UK oil group has only set aside $3.5bn specifically for this and said after the ruling it "strongly disagrees" with Barbier's decision.
"BP believes that the finding that it was grossly negligent with respect to the accident and that its activities at the Macondo well amounted to wilful misconduct is not supported by the evidence at trial. The law is clear that proving gross negligence is a very high bar that was not met in this case. BP believes that an impartial view of the record does not support the erroneous conclusion reached by the district court."
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