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'Email discipline' cited as major Macondo lesson

Defense attorney in sprawling civil case stresses importance handling digital communications with care

"Email discipline" within companies is key in avoiding additional fallout in the event of major accidents such as the Macondo disaster, according to a top defense attorney who worked on the case.

One of the best ways to prepare for potential litigation that involves assigning blame is to understand that digital communications can come back to haunt unsuspecting senders, Gwen Richard of LeClairRyan law firm said at an industry event at the Petroleum Club of Houston on Thursday.

"If you don't want to see your email blown up and cross examined in court, don't send it," she said at a luncheon sponsored by the American Petroleum Institute.

Richard was one of around 80 lawyers who spent years representing Halliburton in the sprawling civil case that aimed to determine which companies and actions were responsible for the blowout that burned and sunk Transocean's Deepwater Horizon rig, killed 11 crewmembers and led to the worst oil spill in US history.

UK supermajor BP was the operator of the rig and ultimately faced a bill amounting to some $62 billion in pre-tax charges stemming from the incident.

BP's email history played a significant role in Judge Carl Barbier's ultimate decision on how much the company would have to pay in Clean Water Act fines, based on the amount of oil that spilled.

Internal company emails presented at the trial showed BP knew that up to 100,000 barrels per day of crude could have been leaking from the stricken Macondo well, while publicly stating that only around 5000 bpd were leaking.

BP eventually reached a settlement with the US government to pay a $5.5 billion penalty, plus interest, related to the Clean Water Act. Nearly 5 million barrels spilled over 87 days in the disaster.

Richard noted a specific BP employee who, prior to the disaster, had been bragging to someone he was "trying to impress" about how he had "saved the day" during a previous well kick at Macondo, which had been called the "well from hell" even before the blowout on April 20, 2010.

That employee was later confronted in court about his email comments, and the incident he had described was turned into "a much bigger deal than it actually was", Richard said.

Barbier ultimately determined that BP was 67% to blame for the blowout and spill, while Transocean shared 30% of the blame. Halliburton was 3% at fault, according to Barbier's ruling.

While "email discipline" is important, Richard stressed that indemnity clauses in contract - especially for complex offshore jobs - is crucial for companies looking to steer clear of legal problems down the road.

Both Halliburton, which pumped the cement for the doomed well, and rig owner Transocean were indemnified under their contracts with BP and were not on the hook for any of the $62 billion BP has to pay.

Halliburton has settled other outstanding cases related to the oil spill for about $1.1 billion. Transocean settled its outstanding claims for about $212 million.

Richard also urged companies who might face litigation to make sure all witnesses - and attorneys - are fully prepared for trial, with a comprehensive understanding of the technology involved as well as court proceedings.