Oil and Water

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Post from Gulf of Mexico Oil Spill Blog (Alabama)

(Alabama Governor Bob Riley urges BP and President Obama to ensure injured residents need not sign unreasonable liability waivers in order to accept claims payments.)

A post from the Gulf of Mexico Oil Spill Blog discussed an interesting issue as the claims process in connection with the BP oil spill moved into its second stage. Obviously, to the extent that BP pays damage claims in connection with the spill, it is interested in capping its exposure and alleviating further liability. However, there is concern being expressed regarding the signing of potential waivers and releases of liability in connection with the claims payments. Governor Riley expressed concerns because the release documents applying to “anyone who is or could be responsible or liable in any way for the incident,” as opposed to just BP. There is also concern about the release being too broad as to the scope of claims, as well as it being applicable to spouses, heirs, parents, partners and others affiliated with the injured parties. Although this news item is not related to sports, recreation, or entertainment, it is instructive as to the need to pay close attention to, and to analyze, the breadth and scope of waiver and release documents that are offered in settlement of claims. The terms do matter, and they can certainly impact important future rights.

NOTE: In the end, BP is not going to settle final claims without some protections. This issue will come down to tailoring the waiver and release documents to a scope acceptable by all parties. As Governor Riley has expressed, “If a release is absolutely necessary, write one that is limited to the person making the claim, the company paying the claim, the damages asserted in the claim, and the information available as of submission of the final claim.”

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