As BP continues to work on cleanup efforts in the Gulf, the company now has to deal with massive civil penalties. Previous estimates put the potential fines at $17.6 billion, but now experts are predicting they may be able to negotiate a lower penalty.
According to Bloomberg.com, the fines could crimp the company’s ability to pay for cleanup costs, force it to sell more assets, and cut into future investment plans of incoming Chief Executive Officer Robert Dudley.
The Clean Water Act makes BP, as owner of the oil, liable for fines of $1,100 per barrel spilled even if it did nothing wrong, says Wayne State University law professor Noah Hall in Detroit. The penalty jumps to $4,300 per barrel if BP was grossly negligent. Hall says gross negligence in a civil case would include making “conscious decisions” that increased the likelihood of an incident like the blowup while engaged in a risky business, such as deepwater drilling.
BP Chairman Carl-Henric Svanberg told Bloomberg Television on July 27 that the company doesn’t believe it will be found grossly negligent or determined to be the sole responsible party for the spill.