It has transpired that Transocean, Ltd., owner of the Deepwater Horizon semisubmersible drilling rig that recently sank off the coast of Lousiana, has petitioned in federal court to limit the damages relating to the incident to $27 MM in total damages.
According to an interview on NPR today, the company is interested in limiting the payout with the stated goal of maintaining a more orderly court action. I’m sure they really are interested in a slow and orderly litigation. They protest that they were required by their insurer to file this petition. Probably true as well.
Only a team of oil industry lawyers under the enchantment of serious groupthink could have come up with this kind of a ploy. Of course, their insurers are keen to limit the payout. Gotta stretch the action out over as long a period as possible and issue as many office actions as possible to try to make the other side bleed out. Gettin’ lawyered up is expensive.
Insurance companies are a major employer of lawyers. Many people are unaware that no small amount of the litigation that consumes our courts is on behalf of insurance companies acting against any deep pocket within reach to recoup their losses. Had to pay a claim on an industrial accident? Well, surely somebody or their equipment is at fault.
The conservatives would have you believe that the courts are choked with liberals litigatin’ against god fearin’ lumbermen and McDonalds coffee makers. There may well be some truth there. But there is a constant buzz of legal action happening against manufacturers of nearly everything by insurance underwriters anxious to recoup their losses. The insurers do a simple calculation. Is it likely that the award from a suit will exceed the litigation costs? If you have a stable of lawyers on staff, you might be able to keep the costs down.
If I were an equipment maker of anything relating to the drilling string on the Deepwater Horizon, I’d be plenty worried.
The people most outraged are the lawyers who represent the families and those injured by the explosion and fire. If the dollar pool for all settlements is limited, then the fees for the law firms is likewise limited. Sorta takes the fun out of it for all of the litigators.