BP Oil Spill has Domino Effect on Businesses

A lot of attention has focused on the economic damages sustained by local fishermen and the tourist industry following the Deepwater Horizon oil rig explosion on April 20, 2010. The BP oil spill affected most of the coastal area on the Gulf of Mexico, including Alabama, Florida, Louisiana, Mississippi and Texas.

There is no denying that the economic losses to individuals and businesses that depend on the fishing and tourism industry for their living are considerable. This is the reason why BP Plc agreed to the Economic and Property Damages Settlement; to provide compensation for those who can prove that their livelihood was directly affected by the environmental disaster. There are thousands of claimants involved in the class action suit that resolved into the Settlement, but not all of them actually qualify for compensation. Claimants must pass a variety of tests to see if the oil spill was the cause of their economic loss such as the V-shaped Revenue Test.

What most people seem to forget is that while tourists and fishing was the lifeblood of the area’s economy, people actually lived there as residents. As such, businesses not involved with either fishing or tourism were also affected. Many residents were forced to relocate as their livelihood dwindled to unsustainable levels. Those who hung on mostly did not have the disposable income to spend on retail stores, movie houses, dentists, and other non-essentials. So while these establishments are not dependent on the cleanliness of the water or the abundance of the catch for their livelihood, they are indirectly affected by the financial losses of those who do depend on the water, much like dominoes falling over.

Whether these other businesses affected by the BP oil spill will qualify under the Settlement remains to be seen. But with proper representation, the legal options open to the these businesses will be thoroughly explored.

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