Gulf Rig’s Owner Invokes 1851 Law to Limit Liability

Transocean, Ltd., the Switzerland-based offshore contractor that owned the Deepwater Horizon floating drilling rig, has asked a federal court in Houston to limit its liability from the oil spill to less than $27 million.

Invoking a little-known maritime law passed in 1851, the company said it should not have to pay any more than the salvage value of the charred oil rig and its freight, all of which sank in 5,000 feet of water after the April 20 explosion that killed 11 workers. Before the accident, the Deepwater Horizon was valued at more than $500 million.

In a statement, Transocean said the court petition was filed at the request of its insurance companies, and the petition will allow the company to consolidate all outstanding lawsuits before a single federal judge in Houston. The company said it now faces more than 100 lawsuits over the spill in several states.

Lawyers for those injured in the blast said the petition could also prevent any claims filed more than six months after the accident.

“It’s very unfair,” said Matthew Shaffer, a Houston attorney who represents a handful of Transocean employees injured in the blast. “It’s a slap in the face to anyone who has been injured because of their negligence.”

Transocean’s filing comes as the Obama administration and Congress seek to retroactively raise liability limits that would cap the cost BP, the runaway well’s owner, would have to pay. The current limit is $75 million. Some members of Congress have proposed raising that to $10 billion.

Shaffer said Transocean must prove it did nothing wrong to cause the accident in order to successfully limit its damages.

“I think it’s hard to believe they didn’t have any knowledge of what was going on on their own rig,” Shaffer said.