BP oil spill trial has begun (1 Viewer)

superchuck500

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Phase 1 of the BP trial (to determine liability) has begun today at the federal district courthouse on Poydras Street. The trial was set to begin last January but a settlement was reached with most of the class of private plaintiffs with economic loss claims. The trial was postponed so that the settlement could be effectuated. The case is proceeding under admiralty/maritime jurisdiction which means there is no jury - but rather the case is tried by the judge (Judge Carl Barbier).

The remaining plaintiffs include the federal government (which has claims for damages under the Clean Water Act and for reimbursement and natural resource damages under the Oil Pollution Act), the state governments (Louisiana being the state with the greatest interest and claims), and the private plaintiffs that were not part of the settlement class . . . which includes classes of commercial fishermen.

The defendants (mainly BP, Transocean, and Halliburton) are not truly mounting a liability defense, per se, but rather the central issues are which of them is liable to what extent (they're all blaming each other) and, more importantly, whether the defendants (mainly BP) were grossly negligent - rather than the ordinary variety. This is tremendously important for the computation of damages because a finding of gross negligence, under the law, allows for multipliers and punitive damages to be awarded under the Clean Air Act (for the federal claims) and under the maritime law (for the commercial fishing claims). For instance, the federal claim under the Clean Air Act could be around $4B under ordinary negligence but more than $16B if gross negligence is found.

There is also talk of real movement in settlement negotiations. This makes sense - as the parties will spend a tremendous amount of resources trying this case where liability is certain and the question of gross negligence could be accounted for in the settlement terms. Frankly, I'd be very surprised if a settlement wasn't reached in the next week or two.
 

geauxboy

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Phase 1 of the BP trial (to determine liability) has begun today at the federal district courthouse on Poydras Street. The trial was set to begin last January but a settlement was reached with most of the class of private plaintiffs with economic loss claims. The trial was postponed so that the settlement could be effectuated. The case is proceeding under admiralty/maritime jurisdiction which means there is no jury - but rather the case is tried by the judge (Judge Carl Barbier).

The remaining plaintiffs include the federal government (which has claims for damages under the Clean Water Act and for reimbursement and natural resource damages under the Oil Pollution Act), the state governments (Louisiana being the state with the greatest interest and claims), and the private plaintiffs that were not part of the settlement class . . . which includes classes of commercial fishermen.

The defendants (mainly BP, Transocean, and Halliburton) are not truly mounting a liability defense, per se, but rather the central issues are which of them is liable to what extent (they're all blaming each other) and, more importantly, whether the defendants (mainly BP) were grossly negligent - rather than the ordinary variety. This is tremendously important for the computation of damages because a finding of gross negligence, under the law, allows for multipliers and punitive damages to be awarded under the Clean Air Act (for the federal claims) and under the maritime law (for the commercial fishing claims). For instance, the federal claim under the Clean Air Act could be around $4B under ordinary negligence but more than $16B if gross negligence is found.

There is also talk of real movement in settlement negotiations. This makes sense - as the parties will spend a tremendous amount of resources trying this case where liability is certain and the question of gross negligence could be accounted for in the settlement terms. Frankly, I'd be very surprised if a settlement wasn't reached in the next week or two.
Do you really think it'll be that quick? The back and forth finger pointing seems to me like it will last several weeks (not that I know what I'm talking about). Do you think because the gov wants it's cut that will speed this up?
 
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superchuck500

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Do you really think it'll be that quick? The back and forth finger pointing seems to me like it will last several weeks (not that I know what I'm talking about). Do you think because the gov wants it's cut that will speed this up?
That the settlement will be that quick? Actually they have been working on it at various times for months now.

The trial would last several months. But I think if it settles it could be pretty soon because the parties want to shut it down. They all have good reasons to settle and settle soon.

But there's a lot of interests at play - that will hinder settlement.
 

efil4stnias

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That the settlement will be that quick? Actually they have been working on it at various times for months now.

The trial would last several months. But I think if it settles it could be pretty soon because the parties want to shut it down. They all have good reasons to settle and settle soon.

But there's a lot of interests at play - that will hinder settlement.
my interest is how the respective insurance carriers will respond to this.

I can see how policies forms for these folks ( well, policy not in the simplest form like we know....reinsurers is more likely what they have for cat claims ) may not have even been decided on at time of loss. Most reinsurance "treaties" are done on 4/1 each year.

There is a boatload of $$$$ at stake here. Its going to be an interesting settlement.
 
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superchuck500

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my interest is how the respective insurance carriers will respond to this.

I can see how policies forms for these folks ( well, policy not in the simplest form like we know....reinsurers is more likely what they have for cat claims ) may not have even been decided on at time of loss. Most reinsurance "treaties" are done on 4/1 each year.

There is a boatload of $$$$ at stake here. Its going to be an interesting settlement.
You're talking about carriers for BP, Transocean and Halliburton?

As far as I know, there hasn't really been much involvement with insurers. BP self insures. I think that Lloyd's underwrites Transocean but I suspect that the limits are well well below the range of damages we're talking about here. Not sure about Halliburton but I don't recall any activity from any Halliburton insurer.
 

efil4stnias

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You're talking about carriers for BP, Transocean and Halliburton?

As far as I know, there hasn't really been much involvement with insurers. BP self insures. I think that Lloyd's underwrites Transocean but I suspect that the limits are well well below the range of damages we're talking about here. Not sure about Halliburton but I don't recall any activity from any Halliburton insurer.
Most companies this size do self insure...to a limit. They usually purchase "reinsurance"...just like an insurance company does, for large cat claims. In the case of BP, i could see them being 1005 self-insured. But for Transocean or Haliburton, i wouldnt be surprised to hear they have some sort of "backstop" to limits of claims liabilities. If London insures Transocean, they may have already reached an agreement to pay policy limits, which may be a drop in the bucket with respect to the overall settlement.

I suspect once this is settled, i will get a summary email from the insurance aspect.
 

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