Aug 11, 2010

Congress Should Delete Lawyer-Driven Scheme on Damage Cap

Sent to the San Francisco Chronicle, August 5, 2010

In its plan to make offshore oil drilling safer (“Senate should act on lax drilling practices,” Aug. 4), Congress should delete the lawyer-driven scheme to eliminate the damage liability cap it established in 1990. Destroying the cap would inspire lawsuits that would direct millions of dollars away from people whose livelihood was disrupted by the Deepwater Horizon spill. Instead, the money would go into the pockets of plaintiffs’ lawyers. The cost risks of future drilling would increase because with no liability limit, smaller independent oil producers may find that insurance to cover accidents is unaffordable.

Note that BP has so far paid out - without lawyers taking their usual massive cut - $277 million in claims payments in more than 93,000 checks to individuals and small businesses. Compare that with the litigation option, which takes years to get money to anyone and carries huge overhead costs.

Lawsuits have a place, when complicated fault and damage questions have to be answered.

But in this situation, the claim fund BP put together in consultation with President Obama is getting more money to more people faster and easier. Eliminating the long-standing liability cap is unnecessary now and would cause problems later.

John H. Sullivan
President, Civil Justice Association of California