• 14
  • June
    2010

The oil rig accident on the Gulf Coast devastated many lives, including workers who died in the accident, their families and the populations of people living in surrounding Louisiana, Texas and more whose incomes and quality of living have been greatly affected. It is no surprise that Transocean and BP are facing a growing number of personal injury cases throughout the Gulf areas in the wake of the biggest oil rig accident in American history.

The public, here and around the world, is scared and angry. It naturally wants to hold someone responsible. Immediate victims of the Transocean accident did not take long to file suit against the company but were quickly answered with a troubling proposed defense from Transocean and their attorney: the Limitation of Liability Act of 1851.

If a judge agrees with Transocean's claim that the Limitation of Liability Act applies to them, then this "little-known law" would make an immense difference in the damages that personal injury victims could be awarded.

The law was created in 1851 in order to protect America's shipping industry from the damage liability claims could have on its growth and success. Most obviously, the rules applied to ships and freighters. In a worrying surprise to many, Transocean's offshore oil rig is considered a seagoing vessel and therefore fits the definition of what the law protects.

A decision allowing Transocean to rely on the Limitation of Liability Act would cap any damages at the amount their vessel was worth at the time of the oil rig accident. According to reported estimates, the rig's worth on the day of the accident, April 20, was $26,764,083.

Therefore, if a judge agrees to apply the rule to Transocean and follow it as-is, a mere piece of the $26 million would have to be enough justice for the thousands of victims behind the various lawsuits against the company to live with.

We will let you know when more decisions regarding how this case will be handled are made, including whether the proceedings will take place in Texas. 


Resource

Little-known law could work in Transocean's favor