A slick litigation process

Massive claims relating to the devastating Deepwater Horizon oil spill are about to come to trial. Hannah Langworth takes a look at the workings of large-scale civil trials

The Deepwater Horizon oil spill is now regarded as one of the worst environmental disasters in history. On 20 April 2010, the Deepwater Horizon oil rig in the Macondo Prospect oil field off America's Gulf Coast exploded, killing 11 workers and seriously injuring 17 others. Following the explosion, subsequent fire, and eventual sinkage of the oil rig, the equivalent of 4.9 million barrels of oil leaked into the Gulf of Mexico before the well was finally capped later in the year.

Despite efforts to mitigate its effects through the use of containment booms and chemical dispersants, the oil released caused very significant environmental damage as it spread. The spill is thought to have damaged the habitats of over 8,000 species of fish, birds, molluscs, crustaceans, turtles, reptiles and marine mammals in coastal areas from Texas to Florida and particularly in Louisiana. The spill especially affected Louisiana's commercial seafood and tourism industries, both of which are hugely important to the state's economy.

This damage caused has led to a corresponding large deluge of legal action. Hundreds of cases have been brought to the courts, mostly by fishing companies deprived of income and owners of hotels and resorts located on or near stretches of coastline affected by the released oil. The majority of these claims have been made against BP, as the developer of the Macondo Prospect oil field where the Deepwater Horizon oil well was located. Rig owner Transocean, one of the world's largest offshore drilling contractors, oilfield services firm Halliburton, and equipment manufacturer Cameron have also been implicated and the US government has brought suits against them all. Many of these claims now look set to come to a head this spring, in what has the potential to be one of the most complex - and high-value - pieces of litigation in US history.

Ground work

On 27 February this year the trial to attribute responsibility and award damages in relation to many of the claims arising out of the disaster will begin in New Orleans. The claims to be settled include the claims of the US government, those of many of the hundreds of individuals and businesses who lost money as a result of the spill, and those between the various companies that have been blamed for the accident.

In many ways, the Deepwater Horizon case is typical of large-scale multinational litigation. It's not unusual for such a long period of time - in this case, nearly two years - to elapse between an incident and resulting claims being heard in court, especially where a matter is complex and high-value.

The work of lawyers for parties involved in these kind of matters, however, begins long before a trial date. One of the big issues for parties and lawyers to settle before their day (or, more likely, many months) in court is to determine where the case will be heard. Where, as in the Deepwater Horizon case, the consequences of an event span many judicial areas (each US state has its own distinct legal system) and the parties involved in that event are spread across the world, the question of which court has jurisdiction over the matter and which set of laws should apply can become very complex, and the subject of legal argument and hearings itself. The answer will turn on the wording of any commercial agreements between the parties involved, international treaties, and core legal principles.

The location of the trial can have a significant impact on the likely verdict and the size of damages awarded, so lawyers will argue on behalf of their clients that their case should be heard in the forum likely to work most favourably for them. In the case of Deepwater Horizon, lawyers for BP and Transocean campaigned for the Texan city of Houston, thought to be more sympathetic towards the oil industry.

As they prepare for a trial, lawyers for the parties involved may well simultaneously attempt to settle the dispute out of court, as doing so keeps information about their client's business out of the public eye, minimises negative publicity, and saves time and expenses. BP has already come to agreements out of court relating to Deepwater Horizon liability with Japanese conglomerate Mitsui, which owned 10 per cent of the well, and also with Cameron International and Weatherford, both of whom manufactured equipment used on the oil rig. A deal between the US government and BP before the trial reaches a conclusion remains a possibility.

See you in court

If a dispute does reach a courtroom, it's usual in complex cases where multiple claimants are bringing similar claims for these to be aggregated where possible in the interests of speed of justice and to ensure that claimants who have suffered near identical losses receive the same result. These bundles of claims are known as class actions, and such claims make up a significant proportion of those to be heard in the February Deepwater Horizon trial.

Deepwater Horizon is a tort matter, that is, one where a party or number of parties are alleged to have caused loss or damage to others through their actions or negligence. In such cases, it's usual for proceedings in court to be clearly split into separate phases - one where causaution is established, that is, deciding who is responsible for the damage, and then a second stage where the size of damages to be paid is settled. The judge presiding over the Deepwater Horizon trial has already indicated that it will follow a similar structure, with a consideration first of how blame should be apportioned between BP, Transocean, and the other companies implicated, to then be followed by an quantitative assessment of the amount of oil released and the financial damage caused, which should allow him to determine how much compensation should be paid by those found to be responsible.

The damages awarded in relation to the Deepwater Horizon oil spill are expected to be very large indeed - BP has allocated nearly $40 billion (

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