LATIN AMERICAN PANEL LIMA, PERU SEPTEMBER 13 -14, 2010 LEGISLATIVE IMPACT OF THE DEEPWATER HORIZON OIL SPILL JOE ANGELO DEPUTY MANAGING DIRECTOR
POSSIBLE CHANGES • Limits of liability in damage claims • Damage awards in death on the high seas • Punitive damages • Limits of liability for oil pollution • Oil spill response plans • Phase-out of single hull tankers
Limits of liability in damage claims • House passed HR. 5503, which would repeal certain provisions of the Limitations of Liability Act of 1851 thereby exposing ship owners to unlimited liability in damage claims not related to oil pollution. • Senate bill S. 3663 would limit the vessel owner's liability in damage claims to not exceed three times the value of the vessel and pending freight, except for wages which would be unlimited. • August 5, Senator Rockefeller introduced S. 3775 which proposes that the vessel owner's liability in damage claims not exceed the value of the vessel and pending freight, except for claims against wages, personal injury or wrongful death, all of which would be unlimited.
Death on the high seas • House passed HR. 5503, which would amend the Death on the High Seas Act by including damage awards for non-pecuniary losses, such as pain and suffering, and loss of care, comfort and companionship. • Senate bill S. 3663 includes the same provisions.
Punitive damages • House bill contains no provisions on punitive damages. • Senate bill S. 3663 would allow unlimited punitive damage awards without regard to compensatory damages assessed in any maritime tort action. • This change would supersede the U. S. Supreme Court decision of Baker v. Exxon which set a 1: 1 ratio of punitive to compensatory damages in certain maritime cases.
Limits of liability for oil pollution • House passed HR. 3534 which would retain the current limits of liability for oil pollution from single hull and double hull tankers, but would require the U. S. Coast Guard to review the limits of liability every three years taking into account the risk associated with such tankers and the Consumer Price Index. • Senate bill S. 3663 would increase the limits of liability for single hull tankers from USD 3000 per grt with a maximum of USD 22 million, to USD 3300 with a maximum of USD 93. 6 million. It makes no changes to the limits of liability for double hull tankers.
Oil spill response plans • House passed bill HR. 3534, which would require all oil spill response plans to include a risk analysis of all critical systems. • Senate bill S. 3663 would require all oil spill response plans to be based upon performance standards. This is of concern because it implies that the response plan holder will be in violation of the regulations if an element of the response plan fails to perform as planned.
Phase-out of single hull tankers • House passed bill HR. 3534, which proposes the phase out of single-hull tankers calling at the Louisiana Offshore Oil Platform (LOOP) or lightering in designated lightering zones after 1 January 2011. Presently under OPA 90, such tankers are allowed to operate at these locations until 1 January 2015. • Senate bill contains no provision on this matter.
Prognosis • House has completed its action • Senate reconvenes Sept 13, must decide what it wants • Conference must meet to resolve differences • National election on November 2 • Target adjournment is October 8
Other Impacts • Ban of offshore drilling off US coast • Charterers tightening standards • Banning of tankers off British Columbia • Reducing tanker traffic through Bosposus Straits
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