Deepwater Horizon Disaster: A Hearing And Litigation Cleanup

Executives from BP, Transocean and Halliburton, are due to face the National Oil Spill Commission – the presidential panel appointed to investigate the Deepwater Horizon disaster at a hearing in Washington D.C. today.

The primary focus of the two-day public hearing will be on the causes of the rig explosion.

This is the fifth public meeting held by the commission as part of its investigation into the disaster. A final report on its findings is due to the President on January 12, 2011.

A cover story in the New York Times magazine this weekend by Douglas McCollam (a contributing editor for the Columbia Journalism Review and The American Lawyer) tells the story of how trial lawyers are competing to gain a piece of the action in the litigation against BP.

The article notes that BP is facing the most expensive corporate environmental catastrophe in history, but that the disaster comes at a pivotal juncture for the American trial bar:

In many respects its [the American trial bar’s] power and influence hit its zenith in the late 1990s, when a coalition suing the tobacco industry on behalf of 46 states reached a landmark $206 billion settlement in a case that both fundamentally altered the public’s perception of cigarette smoking and made billionaires out of several of the lawyers involved. That settlement led to predictions, both dire and hopeful, that the trial bar would use its newfound financial clout to go after a host of other industries, transforming the face of American capitalism.†

Instead, the article goes on, the past decade has seen a series of roadblocks in the trial bar’s influence across the country, due to setbacks in the courts, in Congress and state legislatures due to the tort reform movement spearheaded by the U.S. Chamber of Commerce, and especially in the court of public opinion.

It then discusses the $20 billion compensation fund established by BP that is now being administered by Ken Feinberg:

The Feinberg fund represents an alternative model for the resolution of big disasters, one that moves trial lawyers from center stage to a spot in the chorus. Over the last few decades the trial bar has built what amounts to a private-enterprise regulatory machine, compiling an impressive string of victories over – or at least a series of large settlements from – the most powerful corporations in the world. Some call them parasites and label their style of litigation the “American disease.† Others see them as the last truly effective check on corporate power left in the U.S. system. With the Feinberg model comes the prospect of their further diminishment, a blueprint for a future without big-time trial lawyers. And they are not willing to accept that future without a fight.†

Check out the I.I.I. backgrounder on the U.S. liability system.

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