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The year in business: BP found 'grossly negligent' in oil spill, loses settlement appeal
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The year in business: BP found 'grossly negligent' in oil spill, loses settlement appeal

The litigation surrounding the 2010 Gulf of Mexico continued this year as BP worked to overturn its massive oil spill claims settlement on one front and to convince the courts it was not entirely to blame for the disaster on another.

The British oil giant set aside $42 billion to cover costs and claims from the oil spill.

In November 2012, BP reached at $4 billion settlement with the U.S. government over criminal charges related to the spill.

U.S. District Judge Carl Barbier has already heard arguments for the first two phases of the BP oil spill civil trial and made a ruling on the first phase, which determined fault for the disaster.

The third, penalty-setting phase is set to begin in January. BP could face as much as $18 billion in civil fines.

Separately, BP estimates the cost of its massive settlement with Gulf Coast residents and businesses could top $9.7 billion. The company originally estimated the settlement would cost $7.8 billion.

What happened: Federal courts handed down two major rulings in the oil spill litigation in 2014.

In September, U.S. District Judge Carl Barbier ruled BP was mostly to blame for the oil spill and acted with "profit-driven decisions" that amounted to "gross negligence."

The gross negligence ruling exposes BP to fines of up to $4,300 per barrel of oil spilled, the maximum under the Clean Water Act, the federal law that governs oil spills.

In December, the U.S. Supreme Court refused to review BP's appeal of the oil spill settlement, ending a two-year fight over interpretation of the multibillion-dollar deal.

BP had sought to have the settlement overturned, arguing that the agreement was being misinterpreted to allow millions of dollars in payments to businesses that were not directly harmed by the disaster.

A three-judge panel at the 5th Circuit Court of Appeals in New Orleans upheld the settlement in March. BP appealed to the Supreme Court over the summer.

BP vowed to continue "to fight fraud where it is uncovered" in response to the Supreme Court's decision not to review the case.

What's next: Legal experts agree BP is unlikely to introduce any major new challenges to the settlement agreement in light of the Supreme Court decision. The focus is likely to shift to the ongoing civil trial in 2015.

BP has already appealed Barbier's gross negligence ruling, which it argues relied on invalid testimony on the April 2010 Deepwater Horizon rig explosion that led to the oil disaster.

Barbier also has yet to make a ruling on the second phase of the civil trial, which sought to determine the number of barrels of oil that spilled into the Gulf of Mexico. A ruling could come at any point next year.

In the meantime, the third phase of the civil trial is set to start Jan. 20. This phase will determine how much in fines BP will pay under the Clean Water Act.

Federal prosecutors argue BP should face the maximum fine allowed under federal law, around $18 billion total.

BP says its mounting oil spill liabilities are enough to deter it and others from behavior that could result in another spill. It argues the fine should fall on the lower end of the statutory range.

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