Gavels In the Gulf: The BP Trial - Week 1 In Review

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Derek Park

Someone once told me ‘if you think safety is expensive, you should try having an accident’. Boy was I reminded of this as I watched the opening salvoes in the ‘Deepwater Horizon’ trial last week!

When what has become known as the ‘BP trial’ opened in New Orleans I counted 67 lawyers listed in the official papers. It was reported last year that BP expected to pay $1.74bn on administration and legal costs alone on top of what has already been paid out to those affected by the disaster. Expensive for sure, but at the outset let’s not forget that eleven men died at Macondo. This trial matters if we are really serious about preventing a repeat.

There are actually two trials happening at once, and because the case falls under maritime law there is no jury; the judge will decide. The United States Government is trying to establish that BP and its contractors showed ‘willful misconduct’ (US spelling!) and gross negligence in the way they managed the Macondo well. At the same time Transocean as the owners of the rig are trying to limit its own liability and pass it on to the other companies involved, most notably BP, cementers Halliburton and BOP manufacturer Cameron. In its defence BP is trying to establish that the other contractors, especially Transocean, are the experts in their fields and had what we would call a ‘duty of care’ to BP in the way they carried out their individual parts of the operation.

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Basically it all boils down to the USA against the oil and gas industry with the companies themselves fighting like rats in a sack at the same time. It looks like being messy and a long haul. The trial is scheduled to last three months – and that is just phase 1 covering events leading up to the blow out and the sinking of the rig. Phase 2 will follow, covering the attempts to cap the well and the effects of the spill itself. See what I mean about expensive?

Legal commentators in the States were surprised that it came to trial at all. Faced with the costs and the publicity, surely BP would settle out of court? But no; at the end of the first week those same commentators are now saying we should strap in for the long haul. Apparently the lawyers are the best that money can buy and we are in for a heavyweight contest.

So what did we learn in the first week? To be honest very little that we didn’t know already. Lawyers for the plaintiffs laid out in graphic detail what happened and talked of a ‘corporate culture of recklessness’. No one seemed to argue against the facts of the case, which are that the cement job failed, the negative pressure test was ‘misinterpreted’ and subsequently the well flowed when it was unloaded. The BOP didn’t work and the gas detection and emergency shutdown systems were inhibited. Bang.

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Lawyers for the various companies outlined their defence and their arguments really boil down to these

  • Transocean claims that the well design was flawed and BP failed to identify the risks associated with it. Transocean were therefore unable to drill the well safely.
  • BP says that the ‘Deepwater Horizon’ was poorly maintained and operated and Transocean let them down.
  • It is also claimed that Halliburton did a bad cement job and subsequently failed to monitor the well.
  • Cameron is being criticised for the fact that the BOP didn’t work. They in turn maintain that it was a ‘blow out preventer’ not a ‘blow out stopper’ and if the other parties had been doing their jobs then the BOP could have been closed earlier and the worst of the incident avoided.

Add to all this the mountain of evidence about who knew what and when, not only as the incident unfolded but also with regard to the condition and suitability of the key pieces of equipment, and you can see why this is going to take some time to settle!

BP was taken to task for its ‘every dollar counts’ philosophy and a rather disengaged Tony Hayward, in a video recorded testimony, maintained that ‘safe and reliable operations always come first, whatever the cost’. However various experts, some of whom had previously been on the inside of BP, painted a different picture. BP was also criticised because its own internal inquiry into the incident did not address failings in the management systems.

So the first week was all about drawing the battle lines. The legal and technical arguments will all be played out in great detail in the coming weeks and months. The feeling seems to be that the worst is at least now ‘out’ and the BP witnesses have given nothing further away. The fact that BP are hanging in there, must mean that they and their top flight lawyers have more up the corporate sleeve. We watch with interest!

Seconds out! Round 2! Ding Ding!



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