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The Confederate Lawyer
July 15, 2010

British Petroleum, the Tar Baby, and the Briar Patch
by Charles G. Mills
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GLEN COVE, NY — Those who remember the animal stories told by Uncle Remus will remember the tar baby. Bre’r Fox built a tar baby to trap Bre’r Rabbit. Bre’r Rabbit said hello to the tar baby; when the tar baby did not tip his hat or answer Bre’r Rabbit’s demands for common courtesy, Bre’r Rabbit struck the tar baby and got stuck to the tar. The more the rabbit struggled, the more parts of his body stuck.

Bre’r Fox announced his intention to cook Bre’r Rabbit alive for dinner. Bre’r Rabbit allowed as how this was a pretty bad death but better than being thrown in the briar patch. Bre’r Fox determined to find the worst possible death for Bre’r Rabbit before cooking him. He threatened in turn to hang, shoot, and drown the rabbit. Bre’r Rabbit in each case expressed some horror at such a death but said that it least it was not being thrown into the briar patch. Finally, Bre’r Fox threw Bre’r Rabbit into the briar patch. The tar baby stuck to the brambles in the briar patch. Bre’r Rabbit, who was born in the briar patch and was familiar with every inch of it, escaped on the other side.

The oil spill has been a tar baby for BP. The original corner-cutting on safety keeps being disclosed daily. After the accident, BP understated the rate of the spill by a factor of something close to 100. Although this was only one of the causes for the inexcusable failure to burn off or scoop up as much of the oil as possible, it was an important one.

The top management of BP keeps making statements that can only destroy what little public support the company has. This management has conducted itself in a way that can only make it look like a villain, despite the fact that the failings of the federal government are worse than those of BP. Indeed, it looks like BP and the federal government conspired to cut corners on safety in exchange for campaign contributions.

As a result, BP faces possible criminal prosecution of the company, officers, and employees, as well as a decline in the sale of its products. Above all, it faces damage settlements and awards without any enforceable caps and with huge attorney fees and administrative costs. The minimum estimated damages are $20 billion.

What BP does not legally face is a requirement to put money in escrow to cover these damages or to allow the government to handle the payouts. Although it is legally unenforceable, this escrow fund is the one “punishment” we have inflicted on BP during what will probably be seen as the moment of its greatest unpopularity.

BP has already paid out over 60,000 claims totaling well over $100 million. It has, however, agreed to a proposal, which was not legally required, that it give up the processing of the claims to a government-appointed board and to create a fund of $20 billion out of which these claims will be paid. BP has fooled the public into thinking that the $20 billion fund is some kind of punishment for it, a sort of toss into the briar patch.

By accepting this proposal, BP relieves itself of the costs of processing the claims. Even if it refunds all the actual out-of-pocket costs, it will save the intangible costs, which will be substantial.

Much more important is that BP will not be responsible for the substantial fees of defense attorneys in claims processed by this board instead of handled in the more complex and expensive court system. Furthermore, BP will not be responsible for any of the out-of-pocket costs or the fees of the attorneys of successful claimants. Most claimants will not hire attorneys, opting to get their money through the simpler administrative process; if they are turned down and need an attorney, it will be the board and not BP that turned them down. In either case, the claimants will be less angry with BP.

BP gets a pretty good deal when it unloads all these administrative and legal costs onto the American public. Even if some administrative costs are deducted from the $20 billion, the intangible costs saved and the avoidance of litigation will be a huge benefit to BP.

BP has, indeed, obtained a punishment for itself that is the equivalent of being thrown into the briar patch.

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The Confederate Lawyer column is copyright © 2010 by Charles G. Mills and the Fitzgerald Griffin Foundation, www.fgfBooks.com. All rights reserved.

Charles G. Mills is the Judge Advocate or general counsel for the New York State American Legion. He has forty years of experience in many trial and appellate courts and has published several articles about the law.

See his biographical sketch and additional columns here.

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