Lawyers are due in court Monday to determine the extent to which BP can be held accountable for 11 deaths and damage to the Gulf of Mexico caused by the 2010 Deepwater Horizon oil rig disaster.
Citing a lawyer briefed on talks directed at a settlement, the Times said the U.S. Justice Department, along with Alabama, Florida, Louisiana, Mississippi and Texas, has prepared an offer to resolve the amount of fines BP would have to pay for violating the U.S. Clean Water Act by dumping 4 million gallons of oil into the gulf, and for the environmental damage resulting from the spill.
The Times said the source, whose name was not reported, said "the ball is on BP's side of the table" as to whether to accept a federal and state government offer to settle for $16 billion, first reported Friday by The Wall Street Journal.
BP spokesman Geoff Morrell told the Times the company was not likely to accept a $16 billion settlement and will go to trial Monday regardless of whether government lawyers "put something on the table."
BP has paid out $10 billion to local governments, individuals and businesses, and has spent more than $14 billion on spill response and cleanup. It has set aside $42 billion for further payments, the British newspaper The Guardian reported Saturday.
Should the company lose the case, it faces $17.5 billion in penalties along with fines relating to damage to natural resources, which will likely also be in the billions.
Should BP win the case, fines levied by the government would be greatly reduced, The Guardian said.
"They could end up with a fine that does not exceed $2 billion to $3 billion," said David Uhlmann, a University of Michigan law professor and former chief of the justice department's environmental crimes section. "If this case goes to trial, literally billions of dollars are at stake."
The U.S. government must prove "gross negligence," or that the standard of operation at BP's Deepwater was so far below acceptable that a reasonable person would deem BP to have been grossly negligent.
Rupert Bondy, BP's general counsel, in a statement the company believes it was not grossly negligent and gross negligence "is a very high bar that BP believes cannot be met in this case."
"This was a tragic accident, resulting from multiple causes and involving multiple parties," Bondy said.