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BP Oil Spill Waivers Capped Liability Payments To Coastal Residents At $5,000

Bp

AP/Huffington Post   First Posted: 07/03/10 06:12 AM ET Updated: 05/25/11 05:20 PM ET

VENICE, La. -- BP PLC said Monday that it will pay for all the cleanup costs from a massive oil spill in the Gulf of Mexico that could continue spewing crude for at least another week.

Meanwhile, chief executive Tony Hayward said Monday that chemical dispersants have worked to some degree to keep oil from flowing to the surface, though he did not elaborate. He said on ABC's "Good Morning America" that the new approach seemed to be having a significant impact.

The company posted a fact sheet on its Web site saying it took responsibility for the response to the Deepwater Horizon spill and would pay compensation for legitimate claims for property damage, personal injury and commercial losses.

"We are responsible, not for the accident, but we are responsible for the oil and for dealing with it and cleaning the situation up," Hayward said. He said the equipment that failed on the rig and led to the spill belonged to owner Transocean Ltd., not BP, which operated the rig.

Over the weekend, news emerged that BP was circulating settlement agreements among coastal residents of Alabama and possibly other states, essentially requiring that "people give up the right to sue in exchange for payment of up to $5,000," the Alabama Press-Register reported. Alabama's Attorney General Troy King protested and asked BP to stop distribution of the letters.

The attorney general said he is prohibited from giving legal advice to private citizens, but added that "people need to proceed with caution and understand the ramifications before signing something like that.


"They should seek appropriate counsel to make sure their rights are protected," King said.

As of Monday morning, BP's CEO said the practice had stopped. ABC News reports:

Secretary of Homeland Security Janet Napolitano told "Good Morning America" today that it was unacceptable for BP to ask fishermen it hired to help with the cleanup of the Gulf oil spill to sign waivers that would limit the company's liability.


"I'm looking into that right now." she said. "I was just alerted to that and if that in fact is the case, that is a practice we want stopped immediately."

BP CEO Tony Hayward told "GMA" this morning that the company has already put a stop to the practice.

"That was an early misstep George, frankly. We were using a standard contract. We've eliminated that," Hayward told George Stephanopoulos.

Moreover, a spokesman for BP, said the "waiver requirement had been stripped out, and that ones already signed would not be enforced."


Another potential controversy involves reimbursement, "given that federal law sets a limit of $75 million on BP's liability for damages, apart from the cleanup costs," the New York Times reports.

"It's going to be extremely tricky" to reimburse fishermen and others if economic damages tally above $75 million, said Stuart Smith, a New Orleans-based lawyer who is pushing for Congressional action to amend the law. "They may not be obligated to pay more than that unless they agree to do it."


There is a federal fund, generated from a tax on oil, that may cover as much as $1 billion in damages.

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