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The much anticipated litigation explosion barely mustered a whimper in 2009, but 2010 is shaping up to be a vintage year for litigators.
Lord Grabiner QC
The year opens with the bar’s most formidable opponents, Lord Grabiner QC and Jonathan Sumption QC, clashing their lightsabers in the Court of Appeal (CoA).
Instructed by Ashurst partner Mark Elvy, Grabiner will appeal a High Court ruling that ended with his client, Total, being made vicariously liable for all damages spinning out of the 2005 Buncefield oil depot explosion (see story).
The depot was a joint venture vehicle between Total and Chevron, but when it came to assessing which oil giant should be responsible for the £750m in liabilities caused by the explosion, Chevron decided to distance itself from the site, arguing that it was in fact being run by Total employees.
Sumption, who was instructed to appear for Chevron by Herbert Smith partner Ted Greeno, demonstrated this by showing that all Buncefield employment contracts were with Total; the most senior person on site, who reported into Total’s head office, had been appointed by Total; and the health and safety policy of the site had been dictated by Total.
As such Mr Justice Steel ruled that Chevron should not be held jointly liable for the damages.
Total responded with an appeal. “We still believe our joint venture partner should accept their share of the responsibilities for the incident,” it said.
Specifically, Total’s lawyers will be examining the minute detail in the contract between the two companies. At the original trial Grabiner argued that Total should not be held liable for people who were negligent, and if it were found liable that it should share the cost with Chevron as stated by the joint venture contract. It is on this point that Chevron is appealing to the CoA. At stake is approximately £300m.
In total 275 compensation claims have been issued against the oil company, but lawyers claim that fewer than 20 have been settled, with Total allegedly offering very low payments. Total has refuted these claims and says that 92 per cent of the claims have been settled or came under insurance.
In November Total pleaded guilty to two charges brought against it under the Health and Safety Act: exposing staff and members of the public to risk, and allowing water below the depot to become polluted following the blast.
Despite this, it still maintains that it should not be held liable for the blast.
The warring oil companies have instructed two of the bar’s brightest minds to fight their corner. Round one was won by Sumption, but round two is up for grabs.