Total must pay for Buncefield damage

Oil company liable for claims not met by insurance firms after oil depot blast

By Emma Bamford
Saturday 21 March 2009 01:00

The oil company Total must pay for damage caused to properties in the Buncefield oil fire, a court has ruled.

Claims arising from the explosion – the largest in peacetime Europe – totalled more than £750m. The majority of property owners were insured, but Total will have to pick up the bill for any that weren't after a High Court judge ruled yesterday that the company was liable.

The blast in December 2005 happened in a part of the site in Buncefield, Hertfordshire, that was developed by a joint venture company, Hertfordshire Oil Storage Ltd (HOSL) which was 60 per cent owned by Total and 40 per cent owned by Chevron. Total argued that Chevron should share the costs, but Chevron said Total was wholly liable – and the judge, Mr Justice David Steel, agreed with Chevron.

The case hinged on identifying whether it was Total or HOSL which had the right to control the manner in which the supervisors at the site undertook their work, and was dependent on how the site was operated and managed. The judge found that all those working on the site had employment contracts with Total.

The explosion was the result of a spillage of 300 tonnes of petrol from the top of one of the storage tanks. It formed a huge vapour cloud which ignited, causing widespread damage and injuring 43 people. The blast measured 2.4 on the Richter scale and could be heard 125 miles away.

Total emphasised that the majority of claimants – which include businesses and individuals – had had their claims settled by their insurance companies, and that HOSL agreed to settle all personal injury claims in 2006. Those people seeking payment for uninsured losses were being dealt with on a case-by-case basis, and HOSL had settled almost 70 per cent of the 3,545 claims received.

After the ruling, Total said: "We greatly regret that the Buncefield incident occurred. We would stress that Total has never sought to avoid its responsibilities as a partner in the joint venture at Buncefield. We will continue to make every effort to ensure that significant progress is made to settle outstanding claims and find practical ways to support the local community."

The firm said it still believed its joint venture partner should accept a share of responsibility, and that therefore it is considering appealing.

The judge said that the question of costs and whether leave to appeal should be granted to any party, and on what issue, would be deferred to a two-day hearing in April.

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