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Eversheds comment: BP fine provokes inevitable questions

  • United Kingdom

    15-11-2012

    Commenting on the news that BP has agreed to pay the biggest fine in US history to settle claims relating to the Gulf of Mexico oil spill, David Young, partner and head of the health and safety team at global law firm Eversheds, says:

    "The news that BP has agreed to pay $4.5bn in fines to resolve the serious criminal charges brought against it after Deepwater Horizon provokes inevitable questions. Placing a "price" on a life and environmental damage is not what the fines seek to do (and in any event they are subject to approval by the US courts) any more than would be the case in the UK. All the various compensation and environmental damage claims will be resolved elsewhere so these payments, which are huge, will be measured in terms of impact on the business and destination of the fines.

    "As the incident resulted in a $3.72bn loss in 2010 before a return to profit in 2011 ($25.7bn) an additional $4.5bn over five years, the largest fine ever levied, plus the offset provision of over $40bn against all claims, makes the impact on the business clear. As for the destination of the fines, the US Treasury gets to decide how that money is spent. For comparison, the largest UK health and safety fine still stands at £15m and the largest fine in respect of any similar incident here (Buncefield) was £3m, where no lives were lost."

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