Behind the Scenes: BP Moves to Further Restrict Claimants’ Legal Rights


Guess what? It turns out that BP may not want Gulf residents to “waste our time” taking claims to the courts, but the oil company sure wants that legal option for itself. In a major story out of Delaware, Reuters is reporting from secret documents that Gulf claimants “…may soon be required to transfer to the company their right to sue other defendants.” That’s very different from just agreeing not to sue somebody.

Reuters uncovered the cynical deal in a “final set” of rules being created in relative secret (no surprise there) by Kenneth Feinberg, who BP is paying millions to oversee its Gulf Coast compensation program. The idea is to include rights to sue – especially, we might guess, against Halliburton and Transocean – to make those firms pay BP “back.” This anticipates that anyone accepting money from the $20 billion BP fund would not only agree not to sue the BP, but not to sue anyone else who may have screwed up. Instead, BP will use your rights as leverage against the other guys – because Big Oil knows the power of that leverage better than anyone.

Reuters explained it like this:

Language in the draft proposal requires that claimants transfer, or subrogate, their legal rights to BP. Claimants would sign over their right to sue those responsible for the spill in the same way a car owner might when accepting an insurance payment after being hit by a negligent driver. Just as the auto insurer could use that right to try to recover money from the negligent driver, BP will be able to pursue its partners for a portion of the claims it paid, according to legal experts who have seen the draft document. That could be worth billions of dollars if BP is successful.

So, let’s review: When the right to sue is yours, BP says it’s not worth all that much because of the time and trouble. BP doesn’t want you to worry about all that, and besides who knows what you’ll end up with? When those rights are signed over to BP, their real worth is revealed: Billions of dollars. To that I can only add that there are probably other reasons for the lack of transparency in those secret “final rules,” and none of them are likely to be good for Gulf residents.

The exclusive story from Reuters also has good background on the claims system and other info:

© Smith Stag, LLC 2010 – All Rights Reserved

Add comment

Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
Cooper Law Firm

Follow Us

© Stuart H Smith, LLC
Share This