GLOBAL - Institutional investors, including a UK local authority pension fund, have accused BP of consistently placing cost cutting ahead of safety and environmental concerns in a lawsuit that seeks damages over 2010's oil spill in the Gulf of Mexico. 

The claim was filed at the District Court of Harris County in Texas by the Luxembourg and Oslo-based subsidiaries of DNB Asset Management, Sweden's Carlson Fonder and Dublin-based Skandia Global Funds and GAM Fund Management.

It is seeking "tens of millions" in damages, according to Jeremy Lieberman, partner at US law firm Pomerantz Haudek Grossman & Gross.

In the wake of the Deepwater Horizon oil spill, shares in BP lost nearly 50% of their value.

A separate suit has also been filed by the £4.7bn (€6bn) South Yorkshire Pension Fund, with Pomerantz also representing the UK scheme.

According to its annual report to the end of March 2010, three weeks before the spill occurred, BP was South Yorkshire's largest single UK equity holding, valued at £82m.

By the end of March 2011, its held stocks worth £59m, down to £50m at the end of March this year.

In last month's filing, the five managers argued that, following a refinery fire in Texas in 2005 that killed 15 people and an oil spill in Prudhoe Bay, Alaska in 2006, the company accepted the findings of the independent Baker Report recommending a number of changes to its safety procedures.

The filing argues that statements made in the wake of the report to improve safety were "lies" and that "BP's practice of compromising safety for savings" continued unabated after the issuance of the Baker Report.

Speaking with IPE, Lieberman said it was clear from BP's decision not to use a 'liner' in the last stages of establishing the oil well - which would safeguarded against leaks - had "utterly compromised" safety.

In the filing, the law firm added: "BP decided to forgo the liner option because it would have cost $7m (€5.5m) to $10m more, and have taken longer."

Lieberman added: "Additionally, there were misstatements made about the company's capacity to handle an oil spill.

"Statements were made that they had the capacity to handle a much larger spill than occurred."

Commenting on its decision to file the suit, a spokesman for DNB Asset Management said: "The fund management companies within the DNB Group participate regularly in lawsuits on behalf of the mutual funds under management, provided that this is in the best interest of the shareholders of the funds.

"We prefer, however, not to comment on pending legal proceedings."

Unlike previous lawsuits brought against companies involved in the Deepwater Horizon spill - such as one against Transocean dismissed earlier this year, in which Danica Pension was involved - the case is not a class action.

"The reason why it is not a class action is because of the Morrison ruling, and the only way the schemes can recover money is by proactively stepping forward," Lieberman said.

According to the US Supreme Court ruling in Morrison vs National Australia Bank, foreign investors can no longer bring claims against non-US companies if the shares were acquired on an overseas exchange.

Lieberman added: "Typically, a UK scheme might be covered by an action being taken in the US if it was a US-listed company, but because BP is not a US-listed company, the only mechanism to get recovery is to file an individual suit."

A spokesman for BP declined to comment on the allegations in the suit.