U.K. Government Warns on Treatment of BP Over Oil Spill Claims

September 8, 2014

BP Plc got support from the U.K. government in its U.S. court fight over the level of compensation required under a settlement of lawsuits stemming from the 2010 Gulf of Mexico oil spill.

The U.K. told U.S. Supreme Court judges in a filing that decisions to authorize payments to people who were not injured by the spill raises “grave international comity concerns by undermining confidence in the vigorous and fair resolution of disputes.” The filing shows the government’s interest in the treatment of one of the country’s most prominent companies.

BP, the second-largest British oil producer, is seeking a ruling from the U.S.’s top court after failing to persuade a Louisiana district judge and an appeals court to limit payments under a 2012 settlement to compensate victims of the spill. BP says payments are unfairly being to made to claimants whose businesses couldn’t have been affected by the disaster.

“The lower courts’ rulings have dramatically expanded” BP’s “scope of liability far beyond anything that would seem to be appropriate under our shared common-law traditions or that anyone would reasonably expect,” the U.K. government said in an Amicus Curiae, or friend of the court, brief dated Sept. 4.

The U.K. government’s intervention isn’t related to a decision last week by U.S. District Court Judge Carl Barbier to find BP’s actions in the run-up to the explosion on the Deepwater Horizon grossly negligent. That exposed BP to a potential additional $18 billion in fines.

Corporate Responsibility

The U.K. said the previous rulings could weaken efforts to encourage corporate responsibility by limiting incentives for companies to enter into voluntarily settlements.

“Her Majesty’s government understands the importance of a fair and predictable legal climate,” the U.K. said in a brief filed in support of BP’s application to get a hearing in the highest U.S. court. “It notes that the combination of rulings now before this court has produced an untenable and exceptionally important result.”

The U.S. and U.K. conduct more than $200 billion in trade each year, it said, noting that U.K. businesses are responsible for 17 percent of all foreign direct investment in the U.S. — more than any other nation.

The case is BP Exploration & Production Inc. et. al. v Lake Eugenie Land Develop Development Inc. et. al., 14-123.

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