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Civil trial begins following BP Gulf of Mexico oil spill

Today, lawyers for the U.S. government and victims of the 2010 BP explosion oil spill told a judge in Louisiana that BP put profits ahead of safety and that's why the maritime accident occurred, killing 11 people and dumping millions of gallons of oil into the Gulf of Mexico.

In what will likely be the biggest personal injury lawsuit in years, lawyers representing the plaintiffs said a fatal error was responsible for the explosion and subsequent oil spill: officials with BP and Transocean Ltd. failed to properly read the results of a pressure test on the well.

The civil lawsuit was filed against London-based BP, Switzerland-based Transocean and other parties that were involved with the drilling project off the Louisiana coast. The judge presiding over the case will decide which parties are liable for the devastating oil spill and the damage it caused.

If the judge finds that gross negligence was responsible for the accident, BP could owe the U.S. government up to $17.6 billion for violations of the Clean Water Act fines, in addition to an unknown amount of punitive damages to victims who were not part of the $8.5 billion settlement BP made last year.

The other companies involved, including Transocean and Houston-based Halliburton Co., which performed cement repair on the well, could be held liable for punitive damages for all plaintiffs, including those who were part of last year's settlement with BP. In order for gross negligence to be found, the judge will have to determine that the companies acted with reckless disregard for the safety of others.

Punitive damages are not linked with specific injury like compensatory damages. Instead, they are meant as a punishment designed to deter similar conduct in the future. They are typically much higher than compensatory damages, which are intended to compensate the victim for actual losses sustained as a result of the accident.

This will be an important case to follow.

Source: Bloomberg, "BP, Transocean Accused of 'Reckless' Actions in Spill," Jef Feeley & Allen Johnson Jr., Feb 25, 2013

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