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BP faces a top fine of $13.7 billion for its role in the 2010 Gulf of Mexico oil disaster, down from a possible $18 billion after a federal judge ruled Thursday that the oil spill was smaller than the federal government had estimated.
Legal experts count the ruling as a victory for BP as it heads into the third and final phase of the civil trial over the oil spill Tuesday (Jan. 20).
The Justice Department and BP have spent months preparing for the three-week trial, which will determine how much BP owes in pollution fines under the Clean Water Act.
But could the latest ruling push both sides into settlement talks?
“Lawyers are intrinsically conservative,” said David Logan, a law professor at Roger Williams University in Rhode Island who has been following the trial. “A settlement gives finality in return for perhaps unrealistic hopes that everything in a complex case will break your way.”
Logan said the prospect of a settlement is always a reality in complex litigation. A major ruling like the one on Thursday gives each party a chance to pick up the phone without giving the appearance they lack confidence in their case, he said.
“From this second until this goes to the highest court possible, there is always the possibility of a settlement,” Logan said. “That said, there are a lot of angles here that we may not be aware of.”
BP reached a $4.5 billion criminal settlement with the Justice Department over the spill in late 2012. That included $525 million paid to the Securities and Exchange Commission for charges the company lied to investors during the spill.
The Wall Street Journal reported in early 2013 that the Justice Department was considering offering BP a $16 billion deal to settle Clean Water Act fines related to the spill as well as civil claims under the Natural Resources Damage Assessment. The report cited unnamed sources.
Rumors of a potential settlement continued as the first phase of the three-phase civil trial began in February 2013.
Ed Sherman, a Tulane University law professor and expert on complex litigation, is skeptical a civil settlement is in the cards.
Sherman said both sides have invested too much time and money into the trial. He added both sides have something to gain by moving forward.
Sherman said BP wants the chance to present evidence that the spill wasn’t as bad as it could have been, due in part to its efforts.
And the federal government wants to show that it’s serious about standing up to violators, he said.
“If they settled the question could be raised ‘Well, did you settle too low?'” Sherman said.
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