Shell investors sue BP for millions over Deepwater share price crash
The pension fund of oil giant Shell is suing arch rival BP and its former chief executive Lord John Browne for millions of pounds over the Gulf of Mexico oil spill catastrophe.
Shell Pension Trust is one of more than a dozen giant UK investment funds who have joined a massive lawsuit against BP and its directors at the time including Tony Hayward, who took over from Lord John as CEO three years before the Deepwater Horizon disaster.
The investors are suing over the dramatic crash in BP’s share price caused by the spill and have won the right to sue under UK law but in the generous Texas court. While they had the right to take action in the High Court in London, they have held out to take their claims in the US where higher awards are likely.
Among the other shareholders suing the company are the pension funds for workers in London’s boroughs of Westminster, Kensington and Chelsea and Redbridge. Councils in Cumbria, Lincolnshire and South Yorkshire have also joined in, along with other UK, European and US funds.
In total, the class action lawsuit specialist Pomerantz Law has assembled 32 major BP shareholders from around the world to sue for losses incurred on shares they bought before the 2010 Deepwater Horizon disaster. It is thought to be the first time they have brought legal actions.
Initially, only investors who bought their BP shares on the New York Stock Exchange and other American trading markets were allowed to sue in the US.
But after a recent series of rulings in Texas, UK cases can now be heard in the oil town of Houston under English law.
Many ordinary people who owned BP shares are also included on the list. Other investors are likely to join in as the suit is being prosecuted on a no-win, no-fee basis.
Jennifer Pafiti, a lawyer at Pomerantz, said: “This is a hugely complex case and the outcome will have significant ramifications for securities litigation in the US. The fact that UK pension funds who bought stock on the London Stock Exchange can now participate in bringing claims in the US raises the prospect of recoveries where significant losses have been incurred.”
The latest wave of investors suing comes on top of a number of other UK shareholders attempting to sue in the UK who bought shares immediately after the disaster. These investors claim they would never have bought them had BP not allegedly made “misleading statements” about its safety policies and the difficulties it was having stemming the flow of oil.
UK shareholders were entitled to sue in the UK but have been choosing not to, preferring to hunt in the more lucrative US lawcourts instead.
BP declined to comment on the lawsuit.
As well as suing BP and its directors, the claimants are also suing Halliburton and Transocean, the two engineering giants which worked with BP on the rig, and Cameron International, which made the safety device known as a blowout preventer on the rig.
Bob Dudley, the current BP chief executive, is also on the list of defendants ,as well as other well-known City figures who were non-executives at BP like the mining tycoon Cynthia Carroll, banker Douglas Flint and pharmaceuticals chief Sir Tom McKillop.
As a result of the disaster, 11 workers died and millions of barrels of oil spilled into the Gulf of Mexico in what was the worst spill ever.
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