Will BP have to be sued for any damages above $75 million?

[Kurt_and_Hunter]

Someone on the TV machine was saying that there is about one billion dollars in the industry contingency fund and that BP is required to pony up only the first $75 million of additional cost.

(Current cost estimate around 15 billion)

Will getting the rest require the US suing them? (As opposed to an automatic payment mechanism in the post-Exxon-Valdez framework)

Of course, we may hand them a bill and for PR reasons they'll just pay it.

Anyone know the skinny on this issue?

[FarCenter]

1. Of course -- lawyers must always be involved

[Statistical]

2. There are two seperate costs and I think you are confusing them.

There is the actual clean up mitigation cost. BP liability there is unlimited. If it costs $1 billion they pay $1 billion. If it costs $10 billion they pay $10 billion. This covers everything from the booms & skimmers to drilling relief well to cleaning beaches and reimbursing US govt for its costs (coastguard & military).

However the spill is so large there will be damages to individuals, cities, states. Destroyed wildlife habitats, lost fish stocks, loss of tourism dollars, etc. So there will be a lot of class action lawsuits. BP maximum payout for those is a mere $75 million. Anything above that is paid out from the fund. If the fund is exhausted all excess damages are paid for by ...... taxpayers. Thank Congress for that nice handout.

http://www.dailykos.com/storyonly/2010/5/3/863045/-NYT:-1990-law-limits-BPs-damage-liability-to-$75-million

So
Cleanup/Mitigation: unlimited costs
Damages (lawsuits): max of $75 million