Unless the Justice Department and BP reach a last-minute settlement, the British oil company will return to court on Monday to face tens of billions of dollars in civil claims from the 2010 explosion on the Deepwater Horizon rig in the Gulf of Mexico that could cripple the company for years to come. ...
The Federal District Court trial in New Orleans will bundle suits brought by the Justice Department, state governments, private business and individual claimants against BP and several of its contractors. Decisions on culpability and damages could be a year or more away, but they are likely to have profound impacts on environmental law and determine the viability of BP as a major oil company with global ambitions. ...
Alabama, Mississippi, Florida and Louisiana have presented tens of billions of dollars more in claims, including lost tax revenue due to lost jobs and business, as well as costs related to responding to the spill.
Lawyers for the tens of thousands of people and businesses seeking redress for damages said they will argue that BP, Transocean, Halliburton and Cameron, the manufacturer of the failed blowout preventer, are all negligent or grossly negligent for mismanaging safety procedures. ...
BP has set aside $42 billion for payments, much of which has come from divestments over the last three years, including the disposal of its stake in a Russian affiliate, TNK-BP.
The company has already spent more than $14 billion on spill response and cleanup, and nearly $10 billion in payments to affected local governments, individuals and businesses. ...
The federal government initially estimated that 4.9 million barrels of oil spilled in the accident, meaning liabilities of as much as $5.4 billion to $21 billion. BP has claimed that 3.1 million barrels should be the uppermost spill limit.
The company won a victory this week when the government agreed to its contention that it should not have to pay penalties for the leaked 810,000 barrels that it captured before polluting the environment. That means the maximum penalty would be $17.6 billion.
via www.nytimes.com
It seems that high transactions costs (multiple parties on both ends) have derailed private negotiations to compensate for a negative externality.
Please use the comments section to let me know how I have misinterpreted the Coase Theorem.