Here’s a quote from a Houston Chronicle story:

“‘We know this because, during a conference call with Gulf Coast attorneys general, BP General Counsel Jack Lynch acknowledged that gross negligence would be revealed as a cause of the explosion that led to the oil spill.””

Wow! That’s an “explosive” admission.

However, a BP spokesperson said that the letter that admitted gross negligence was “incorrect.”

Here’s what the article said:

“‘While BP respects Governor Perry and Attorney General Abbott and appreciates the opportunity to work with them, the recitation in their letter is simply incorrect,’ said spokesman Daren Beaudo.”

“‘During the conference call, neither Jack Lynch nor any other BP representative stated that gross negligence would be revealed as the cause of Deepwater Horizon tragedy.‘”

“Gross Negligence” is a legal term. The Legal Dictionary at thefreedictionary.com defines gross negligence as:

“gross negligence n. carelessness in reckless disregard for the safety or lives of others, which is so great it appears to be a conscious violation of other people’s rights to safety. It is more than simple inadvertence, but it is just shy of being intentionally evil. If one has borrowed or contracted to take care of another’s property, then gross negligence is the failure to actively take the care one would of his/her own property. If gross negligence is found by the trier of fact (judge or jury), it can result in the award of punitive damages on top of general and special damages.”

The on-line reference also says:

“Gross negligence is a conscious and voluntary disregard of the need to use reasonable care, which is likely to cause foreseeable grave injury or harm to persons, property, or both.”

Why is the admission of gross negligence a big deal?

Because:

1) The fine for an oil spill goes from $1,100/barrel to $4,300/barrel. If this spill is estimated at 3 million barrels of oil, the difference is the fine could be $9.9 billion.

2) The cap on liabilities at $75 million that BP has voluntarily waived becomes void. (Some might say this is moot because BP waived the liability, but otehrs would say that is why BP waived the liability because they knew the would be found “grossly negligent.”

3) The contracts with Anadarko (part owner of the well) let’s Anadarko out of paying their share of damages if BP is found to be guilty of “gross negligence.”

4) If BP admits gross negligence, every Deepwater Horizon related lawsuit will seek punitive damages. Although the finding of gross negligence does not guarantee punitive damages, it is a step along the path to awarding them. This could double (or more) the civil penalties that BP is liable for.

All of those reasons mean a finding of gross negligence will cost BP big bucks.

How much can an accident cost? A lot more if you are found to be grossly negligent. The $20 Billion currently set aside by BP may be a drop in the bucket if they are found to be “grossly negligent.”