BP to Defend Against 'Gross Negligence' in Civil Trial

British oil major BP will try to convince a US federal judge in a civil trial that the 2010 Deepwater Horizon oil spill was not due to gross negligence, as the troubled oil giant looks to reduce the amount of fines as much as it can.

The trial is set to begin in the US state of New Orleans, and would decide on the total amount that the oil giant and three contracted companies will pay for the worst environmental disaster in the US.

The trial is expected to charge BP with the biggest civil fine in history. The company will face claims from the US states affected by the oil spill and the US Department of Justice.

The civil trial would find out the causes of the spill and assess the responsibility of the accused, including BP, contractor Halliburton, rig operator Transocean and Cameron, the manufacturer of the blowout preventer to stop oil leaks.

The parties will try to convince a federal judge that mistakes that led to the disaster, claiming 11 lives and spilling millions of gallons of crude oil into the Gulf of Mexico, were not due to gross negligence. If convicted of gross negligence, the environmental fines will rise to as much as $17bn (€12.9bn, £11.2bn).

Under the Clean Water Act, the fines will be $1,100 for every barrel of oil spilt through ordinary negligence and $4,300 a barrel through gross negligence. If charged with simple negligence, the company has to pay a minimum fine of $4.5bn.

The trial will proceed in two phases. The first phase will focus on the causes of the accident, who should be held responsible and to what degree. In the second phase, which is not expected to start for several months, the court will determine the amount of oil that was spilled in order to calculate environmental fines.

Earlier, BP won a ruling to deduct 810,000 barrels of oil captured by the company from the amount of spilled oil in Monday's civil case. The development would reduce the potential fine by $3.4bn.

The company has already settled a number of cases in connection with the oil spill. In November, it agreed to pay $4.5bn to settle criminal charges relating to the spill. Further, the company will pay $7.8bn in a settlement with people and businesses affected by the spill.

Meanwhile, credit rating agency Moody's noted that BP is facing risk to its credit profile due to financial uncertainties, as it closely watches the trial and the potential fines on the company. The agency estimates that BP has spent a total of $37.2bn in pre-tax costs in connection with the oil spill.

"The trial will provide strong clues as to how Macondo will affect BP from a credit perspective," said Francois Lauras, a vice president - senior credit officer in Moody's Corporate Finance Group.