Oil disaster rig owner tries to escape liability
'Deepwater Horizon' exploded on 20 April and the effects, both ecologically and economically, will be felt for years to come.
Gulf of Mexico disaster oil rig owner Transocean's ploy to limit liability will be fought, according to law firms representing Deepwater Horizon workers.
The explosion in the Gulf of Mexico killed 11 workers and injured more than 100 after suffering a catastrophic blowout. The owner of the rig, Transocean Ltd, is already attempting to limit its liability for the blast to just over $26 million by filing a petition in the Southern District of Texas.
According to Tony Buzbee of the Buzbee Law Firm which is representing 10 of the injured men, ‘Transocean has accepted more than $430 million in insurance proceeds related to the Deepwater Horizon explosion and oil spill, but has asked a Houston federal court to limit its liability to only $27 million, citing an arcane law that dates back to the 1800s. This is a despicable action which contorts the intent of the Limitation of Liability Act, which allows a vessel owner to limit its liability to the post-accident value of the vessel. This dishonors the families of the 11 men who were lost on April 20, but also those who were injured on the rig, and the many more affected by the oil spill.’
‘There are limited circumstances when vessel owners are able to limit liability under the Act. We don't expect that any of those circumstances will apply here,’ explains Ryan Zehl, who is currently representing several more injured workers.
He explained that for the limitation to work, Transocean must prove that it did not have prior knowledge of the explosion's cause and, as a result, could not have prevented it. If they show this, Transocean's total liability could be limited to the value of the Deepwater Horizon after it exploded and sank. This is $26,764,083, well below its pre-accident value of $650m.
‘The Act was passed before insurance covered against disasters, said Mr Zehl. ‘Because vessels, like the Deepwater Horizon, are now insured, the vessel's owner can, and in this case would if the limitation applies, collect more in insurance proceeds than it has to pay out in damages. Today, it's just an antiquated remedy that gives companies like Transocean a way to escape responsibility.’
Meanwhile the move to raise the present liability cap that would mean BP could be made to pay out up to $10bn for the Gulf of Mexico spill has been blocked by the US Congress, as it could harm the nation's energy security and the ability of American firms to compete against large nationalised oil and gas companies, although a further Senate hearing is due as MJ went to press. However, there is no upper limit on the compensatory or punitive damages a company can be made to pay if it is found responsible for a spill.
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