Tuesday, September 14, 2010

BP (NYSE:BP), Halliburton (NYSE:HAL), Transocean (NYSE:RIG) Say Gulf Victims Have No Right to Sue Yet

In a filing with the court, BP (NYSE:BP), Halliburton (NYSE:HAL) and Transocean (NYSE:RIG) say the numerous individuals and businesses may not have the right to sue the companies yet over the Gulf oil spill.

According to the court papers, BP and the others said they believe the alleged victims should have to take their claims to the $20 billion compensation fund before bringing a lawsuit against them.

Obviously the strategy of the oil companies is to push the lawsuits toward the escrow fund to deal with the matter in order to decrease the growing number of them.

Most of the types of lawsuits they're talking about are those where claims of economic losses are involved, especially workers and businesses.

The fund, administered by Kenneth Feinberg, would have 90 days to accept or reject a claim, which at that time the claimants could proceed with a lawsuit.

With things moving into the discovery stage and requests for documents and electronic communications being made, the oil companies said the question of the right to sue needs to be decided before they provide all the documentation to plaintiffs.

While the elimination of lawsuits looks like it's in the best interests of the oil companies, in truth, when you consider the fees by lawyers and amount of time it takes for many of these lawsuits to be played out, most of the alleged victims would be far better off taking the money from the escrow fund if they qualify, rather than pursuing lawsuits.

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