BP Oil Spill Liability is Sorting Itself Out

The New York Times reports that British Petroleum's partner in the Deepwater well that exploded last year in the Gulf of Mexico, Anadarko Petroleum, had agreed to pay $4 billion to settle claims related to the oil spill. The explosion caused an oil spill which is is the second worst natural disaster in U.S. history, after the dust bowl.

The settlement ends a dispute between BP, which operated the well in the gulf, and Anadarko, which owned a 25 percent stake. BP, whose investigation concluded that the accident was the result of conduct involving several companies, continues to look for contributions from its contractors, Transocean, which operated the rig, and Halliburton, which was responsible for cement work.  The Deepwater Horizon situation will be one of the subjects covered by the ABA's Tort, Trial & Insurance Practice Section's Disaster Initiative program on disasters caused by negligence at the ABA mid-year meeting in New Orleans on February 3, 2012.  For more information about this program and the other TIPS Disaster Initiative programs, please visit the TIPS Disaster Initiative page by clicking here.

TIPS Wows Them in Seattle

The Super Lawyers Blog has a great article about the ABA's Tort, Trial & Insurance Practice Section's Cyber Security program held at the TIPS Fall Meeting in Seattle, Washington on October 13, 2011.  Three great panels discussed cyber security, terrorisim, and the insurance issues related to cyber security.  According to the blog the discussions were dynamic, captivating, and interesting.  Check out the blog for the highlights of the program.  For more information about upcoming TIPS Disaster Initiatiive programs, and to access the Disaster Initiative teleconferences and podcasts, click here.

Oil Contractors Likely To Strengthen Liability Protection After Spill Citations

Dow Jones newswire reported on October 13, 2001 that oil contractors will be looking to strengthen liability protection in view of the recent government fines levied against oil rig contractors arising out of the Deepwater Horizon disaster.  Here are some excerpts from the article:

"However, if the courts determine that the government has the right to issue a citation to oil-service contractors, there's no contract that will protect them from the fine, according to Larry Nettles, an environmental attorney with Vinson & Elkins, a Houston law firm. "In most jurisdictions the courts do not allow indemnification for fines and penalties, because it defeats the purpose," which is to punish bad behavior, Nettles said.
Still the industry is expected to bulk up its contracts even more in the wake of the regulators' action, legal experts say, to get as much liability protection as possible.  "They will probably review their contracts," said Owen Anderson, a professor of law specializing in energy at the University of Oklahoma.
The contractors currently have considerable bargaining power to win such new concessions from rig operators on contract protection. Relatively high oil prices have led to a shortage of drilling crews and have put oilfield services at a premium, giving the contractors the upper hand in negotiations."

Indemnification for fines and penalties is an interesting insurance issue and is often addressed in contracts in the form of indemnities and hold harmless agreements.  The Deepwater Horizon situation will be one of the subjects covered by the ABA's Tort, Trial & Insurance Practice Section's Disaster Initiative program on disasters caused by negligence at the ABA mid-year meeting in New Orleans on February 3, 2012.  For more information about this program and the other TIPS Disaster Initiative programs, please visit the TIPS Disaster Initiative page by clicking here.

WORM-The Fight Against a Cyber Terrorist Threat

Mark Bowden, the author of "Black Hawk Down," has written about a different kind of battle in a different kind of war in "Worm." Worm is reviewed in today's New York Times.  The review summarizes the threat, the response, and the difficulties inherent in writing about cyberterrorism for "amateurs." In 2008, Conficker was created and metastasized in the cyber world, making up to 83 million possible contacts in a very short time.   Worm tells the story of the malware and the people who fought it, in terms that a non technical reader can follow.  The book gives readers an overview of the history and development of these kinds of threats.  While the reviewer notes that the book lacks drama because of the nature of the conflict, because the purposes of Conficker were never understood and Conficker did not fulfill the worm-fighters’ dire predictions, Bowden's attempt to increase awareness of cyber threats is worth a read.