In football, players who jump on the ball carrier after he’s been tackled get a 15-yard penalty for piling on. But in a courtroom, piling on can get you billions of dollars.
That’s exactly what the trial lawyers are doing in the lawsuits against BP for the Deepwater Horizon spill.
In 2010, BP’s oil rig exploded, killing 11 workers and spilling almost 5 million barrels of crude oil into the Gulf of Mexico over 87 days. It was a disaster for BP and the Gulf states, but since then, the company has attempted to make amends.
In 2012, BP agreed to fo ur years of government monitoring of its safety practices and ethics, paid $4.5 billion in fines to the Department of Justice and was suspended from new government contracts. Forbes magazine reports that, as of February 2013, the Gulf oil spill has cost BP more than $42 billion in legal settlements and environmental restoration.
Apparently, that’s not enough.
Trial lawyers say the settlement agreement BP negotiated is actually open-ended, and they are actively recruiting businesses to make claims against BP even if the spill didn’t directly harm those businesses.
BP challenged that interpretation, but the settlement fund’s administrator agreed with the trial lawyers, as did U.S. District Judge Carl Barbier, once the head of the Louisiana Trial Lawyers Association. BP has appealed Barbier’s ruling to the Federal Appeals Court.
What’s in it for the lawyers? Fees totaling millions or even billions of dollars.
Critics charge that this is nothing short of a feeding frenzy by trial attorneys to turn the BP settlement into a bottomless pocket for the trial bar. Trial lawyers respond that it’s the agreement BP signed, and BP’s lawyers should have done a better job if they didn’t like the terms.
People who may be tempted to cheer for the trial lawyers as they pile on BP should think again. This isn’t about just BP, because if the trial lawyers succeed in expanding damage suits against BP to those not directly impacted by the spill, it opens a whole new area of costly litigation that we will all pay for.
Imagine that your home insurance is deemed to cover not only the damages to your neighbor who was injured on your property but also to that neighbor’s dry cleaner or grocer or car service because they didn’t make as much money while the neighbor was laid up. Where does it end?
That’s called piling on. What employer could do business — or afford insurance — under those circumstances?
While it is important to seek justice, it is equally important that we not declare war on U.S. companies that are already battling global competition, high taxes, costly regulations and the economic slowdown. After all, they provide thousands of family-wage jobs, pay dividends for retired people and stimulate the economy.
Lawsuit abuse saps resources that businesses could otherwise use to create jobs or expand. In fact, liability costs in the U.S. amount to roughly 2 percent of our gross domestic product. Runaway lawsuits are especially costly to manufacturers and contribute to the structural cost disadvantage facing U.S. manufacturers.
According to the Manufacturers Alliance for Productivity and Innovation, it is 20 percent more expensive to manufacture goods in the U.S. than it is among our major competitors. Needlessly adding to those costs makes no sense.
While it may be fun to watch trial lawyers pile on BP, we should take care, lest we find our economy and our jobs buried at the bottom of that pile.
Don Brunell is the president of the Association of Washington Business. For more about AWB, visit www.awb.org.