subject: BP and the Oil Spill: A Big Misconception and 3 Big Questions [print this page] BP and the Oil Spill: A Big Misconception and 3 Big Questions
Asghar Kamboh: What is the biggest misunderstanding about the responsibility of the BBC?
Noah Hall: This is a big question. On the one hand, and I think that some people are going to extremes responsibility BBC and are expected to go bankrupt any day now. But while 40 billion dollars or 50 billion dollars, the amount would be unprecedented responsibility for the environmental disaster, and BP of unprecedented wealth, income, and cash reserves. And that 40 dollars or 50 billion U.S. dollars, which I would call "Return to napkin" estimates will be payable over five to 10 years. So you're really just talking maybe five billion dollars, 10 billion dollars a year in liability, which the company the size of BP can actually absorb and pay and may still be solvent and profitable.
On the other hand, it seems that there is a misunderstanding, especially among some of the most hostile circles of companies, BP is going to get out of these free Scottish, without having to pay a dime or maybe just 75 million dollars or something. This is nonsense as well. BP is to pay a huge bill for this purpose. I think the truth is really just somewhere in between. I do not believe that this disaster on its own and went bankrupt BP. I do not think BP is going to get out of paying for all damages resulting therefrom.
I think in fact, legally speaking, this situation will be clear to some extent in that BP will be responsible for the damage. They are going to be writing checks for damage. There will be litigation over the losses and economic damage to those companies and property owners and local governments in the Gulf region. But in fact I think that BP will be responsible, they're going to pay, and they have enough money to pay them.
Greer: Noah, when talking about this with the students of private law? What are the great questions to ask and we are trying to get a sense of how this happens? In terms of responsibility BBC
Hall: Absolutely. A couple of things. One, is the BP will be able to bring other responsible parties to share the burden of responsibility? And Transocean Inc. (NYSE: advance) and Halliburton Company (NYSE: HAL) that the two companies that I think one of the first and foremost. Let's say the BBC on the hook for 40 billion dollars. May be trying to say Transocean responsible for 10% of Halliburton, which is responsible for 10% of that. So I think you'll see some fighting between the responsible parties. I have a hunch, though, in fact, is that it will be a successful strategy, especially for BP. Transocean owned by tampered with. We have not seen much evidence that Transocean any fault or to have any incentive to cut corners or rush the drilling and safety procedures, because the payment gets Transocean day after day as they are leasing drilling rigs to BP. So it was fine if Transocean BBC took an extra month to do the right to work. The company had a small role as well, and lots of it and maybe having already made errors. So I think the BBC will not get a lot of help from other responsible parties in expressing it.
The second issue is whether the BBC blatant neglect or do anything that would justify punitive damages. We know that the BBC is responsible, and most of the laws which will be presented in the context of claims, it does not even really matter if they did something wrong. It does not matter if they do everything from the book or take the best precautions available, they are strictly liable. Basically, the oil in the water. BBC responsible. They had to pay the claim. But you're going to see claims for things like punitive damages, when we're going to really know how to react terrible BP and if it really does something wrong or whether the only responsible party when the impact of this disaster.
The third thing I would like to be fun watching how the economic loss claims, as this is that can really spiral out of control. Now, most of the economic loss claims that are being made is very clear. There are things such as the Gulf-based fisherman boats during the oil spill, and can not go out and earn a living --- to pay them $ 5000 per month or $ 10,000 per month, and very direct. But what will happen after five years from now, when the tourism industry in Florida is still 20% or 30%, and they're going to claim that as a result of the oil spill BP? BP will of course say no, but is the result of the recession, marketing, bad, and consumer preference, or all the other factors that enter into the presence or absence of the industry in good condition or the economy in good condition.
This will be the big question - how much of the economic impact in the Gulf region will be hung on the BBC? It will be BP's legally responsible for that? This, in fact just going to go down to a battle of economic experts.
