NewsWire

Questions Remain on Changes to Liability Cap
The federal Oil Pollution Act caps liability for damages from an offshore spill at $75 million per incident, a limit that BP waived with a pledge to fund up to $20 billion for claims in the aftermath of last year's spill. While the National Oil Spill Commission investigation concluded that Congress should significantly raise the liability cap, some legislators and environmentalists are pressing for removing the cap altogether. "Before making radical statutory changes we need to consider the practical application of the existing civil and criminal enforcement tools available to federal agencies that provide enormous leverage to compel a company to waive the cap," says James Morriss of the Austin office of Thompson & Knight. "The significant issue is making sure that companies engaged in offshore exploration and production have the financial strength, either individually or through alliances and insurance, to address the consequences." For more information, contact Barry Pound at 800-559-4534 or barry@androvett.com.

Federal Investigations Moving Slowly
While the Department of Justice continues to investigate the possibility of criminal charges against the companies and individual managers involved in the Transocean spill, it's not surprising that prosecutors are moving methodically. "Although proving simple negligence under federal statutes may sound simple, assembling the evidence in a case of this magnitude requires a lengthy process," says Richard Roper, a longtime U.S. attorney now with the Dallas office of Thompson & Knight. "There is environmental damage to assess, Congressional testimony to validate, and a host of other material to review. The potential of bringing criminal charges against individuals, not just corporations, adds a new layer of scrutiny that's actually rare in environmental cases." During the past two decades, there have only been seven criminal prosecutions following oil spill events brought by federal prosecutors. For more information, contact Barry Pound at 800-559-4534 or barry@androvett.com.

Prosecutors Must Stick to Facts
Public pressure over the still-evolving economic and regulatory fallout from the April 2010 deaths and environmental catastrophe at the Deepwater Horizon rig can't be part of the prosecutorial calculation when looking at whether any people or entities should face criminal charges, says Chris Flood, a former prosecutor and now a partner in the Houston office of Flood & Flood. "We're hearing federal prosecutors are looking at manslaughter charges and may reach up the corporate ladder. Whether they look at accusing white-collar or blue-collar individuals, it has to be without pressure from publicity and only with an eye to the facts and the law," says Flood. "People should not be indicted based on public opinion." For more information, contact Alan Bentrup at 800-559-4534 or alan@androvett.com.

Litigation Moving Forward
Following the April 20 Deepwater Horizon oil spill, the immediate focus was on stopping the leak and minimizing the impact on the environment. Attention has since shifted to recovery and litigation. The news on the quicker than expected pace of recovery in the Gulf region is encouraging, however the same cannot be said about the litigation. "Litigation is moving forward, but the complexity of the cases mean that they will not move quickly through the courts," says Donald E. Godwin, Chairman and CEO of Dallas-based Godwin Ronquillo PC, who serves as the lead trial attorney for Halliburton in connection with all litigation and investigations concerning the well blowout and oil spill. For more information, contact Rhonda Reddick at 800-559-4534 or rhonda@androvett.com.

Indemnity Clauses Proving Huge
BP's contracts for services on the Deepwater Horizon rig with Halliburton and other service providers included accident indemnity clauses that experts say will be tough to break. "The companies that contracted with BP would have to pass the high bar of being found grossly negligent to break those contractual indemnity clauses," says John Zavitsanos, an oil and gas litigator and partner at Ahmad, Zavitsanos & Anaipakos in Houston. "Too often when brokering deals, business executives focus on the dollar amounts and deadlines, and leave accident indemnity clauses as ‘throw aways' for negotiation talks. The Deepwater Horizon case proves the indemnity clause can be the more important to the bottom line than the rest of the entire contract." For more information, contact Mary Flood at 800-559-4534 or mary@androvett.com.