Product Liability Suit Against British Petroleum

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Table of Contents

Introduction
Product Liability Suit against BP
Mitigation against product liability suits and other crisis
Conclusion
References

Introduction

BP is a multinational corporation whose main activities include exploration and trading in oil and gas. BP is the 3^rd largest company in the energy sector in the world and 6^th in the overall category. The company is involved in several activities within the energy sector especially exploration of gas and oil, refinery and distribution of the same, generation of power and in retailing of gas and petroleum products.

BP has also made major strides in the renewable energy sector especially in bio-fuels, wind power, hydrogen and solar energy. The parent company has its global headquarter in London.

There have been several suits brought against BP due to their negligent and unethical behavior which put both people and environment at risk. BP has had many negative incidents which have dented its social responsibility image around the globe. Some of these mistakes have had severe environmental impacts and have affected the livelihoods of several people.

There seems to be a culture of impunity within the company’s top executives since some of its mistakes keep happening again and again. Needless to say the company has ended up on the negative side of several product liability suits due to accidents in its site and the use of some of its products.

These suits have been brought by people, companies and groups who have been hurt during these accidents and are demanding justice and retribution for the actions or lack of them on the part of BP.

Product Liability Suit against BP

There have been several product liability suits against BP across the world due to accidents and harm from using some of its products. But this paper considers the recent and ongoing litigation against BP due to the adverse effect occasioned by the oil spill at the Gulf of Mexico.

Recent revelations by the Orlando Sentinel have revealed a damning truth on the part of BP that the designs they used in the deep water rig were not the best for that particular purpose and location. Even more horrifying is the accusation by the sentinel that this particular design was not only inappropriate but also flawed. This conclusion was arrived at through several interviews with engineers.

This unearthed the fact that BP chose to use a design which was cheaper and unreliable. In addition to the used design, there were several mechanical blunders which should have been an indication of possible crisis. Oil specialists have singled out the Gulf of Mexico as one of the places where drilling is hard and therefore requires safer and reliable drilling methods.

BP clearly ignored all this pool of great advice and chose to place cost cutting before human safety and environmental concerns. The resulting spill, one of the largest in history, has put BP on the line of fire and is facing several product liability suits from affected people and businesses.

Due to the many product liability suits filed against BP, the plaintiff lawyers have decided to use a litigation strategy called multidistrict litigation (Ashby, 2010). This system of litigation has been used several times in the US in major litigation against major companies. This allows all cases brought against a single company to be brought to one court and be heard by one judge for the purpose of efficiency.

The major benefits are time saving mechanisms like sharing depositions and pooling resources in the process of evidence collection. This in turn reduces resource wastage in scenarios where lawyers would have to argue the same in different courts. BP recently had to pay several millions due to a similar issue in Alaska and it’s highly likely that they will be ordered to do so again after the completion of this product liability suits.

Mitigation against product liability suits and other crisis

Six sigma analyses should have influenced BPs management in using the right system from the start or changing it when system and maintenance problems started occurring. They should have used the data collected in this deep sea rig and in other sites to calculate the possible risk and enact the right mitigation measures.

But they dismissed most ideas brought about by renowned experts in the field, something which contradicted the sigma approach (Meredith & Schafer, 2010). They also failed to establish high standards in building the rig and hence the low standards might have caused the explosion and the escalation of the crisis.

The cause and effect ideology can be seen at work during this crisis where BP’s faulty design and their unwillingness to listen became the cause of both the disaster and the great extent to which it affected the surrounding environment. Needless to say, had they being reasonable from the start, they would have prevented the current cost of redress and the subsequent product liability suits.

Crisis management has gained significance in recent times due to the ability of single crisis to erode the benefits accrued over time by a firm and cause loss of life and revenue. However, the implications of a crisis might haunt an organization as is the case of BP for a long time to come.

BP has shown that the cost of a crisis is monumental and the cost of redress is always massive. One of the risks that face companies during times of crisis is product liability cases. There is no better example than BP’s recent historical settlement of a product liability case. The result is not just paying out large settlement or damages but the cost of instituting a PR campaign to rebuild the company’s image.

It is not always possible to predict the occurrence of a crisis and the resultant loss that follows, but it is possible to mitigate that probability. This would ensure that should they occur, the extent to which they affect the organization and those around the affected areas won’t be as drastic if no measures had been taken.

It is no wonder that many feel that BP should be punished harshly for its many blunders that cost lives and severe damage to the environment. Most academicians believe that there exist enough signals to predict the possible occurrence of catastrophe and ignoring them until it’s too late constitutes negligence.

It is only fare then that companies who failure to do so should be held accountable and be made to pay for the cost of repair and compensate the affected individuals. So long as companies continue to ignore mitigation by creating strong crisis management teams, then product liability suits will are here to stay.

Conclusion

This paper shows clearly that the conduct of BP was irresponsible and should be held accountable for the loss of life and the catastrophic damage to the environment. Although the company has pledged billions in rehabilitation effort, it is not enough for the people who have lost a livelihood due to the oil spill.

It remains to be seen whether the courts will rule in favor of the several plaintiff’s who have filed a product liability class suit against BP. But by all indications, it would be unjust to rule otherwise in the face of such gross misconduct and negligence on the part of BP.

References

Ashby, J. (2010). As BP Suits Take Off, a Hard Look at the ‘MDL’ Process. Wall Street Journal. Web.

Meredith, J. & Shafer, S. (2010). Operations Management for MBAs, 4th Ed. John Wiley & Sons.

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