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Merseyside, MNOPF join Norges and ABP in suing BP over oil spill

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The Merseyside Pension Fund, the UK scheme for employees of IBM and the Merchant Navy Officers Pension Fund are among the European investors taking BP to court over the 2010 oil spill in the Gulf of Mexico.

The UK schemes join plaintiffs Norges Bank – on behalf of the NOK5.1trn (€630bn) Government Pension Fund Global – €310bn Dutch civil fund scheme ABP and more than 40 European funds and asset managers in taking the company to court over its role in the accident, which saw the oil spill continue for 87 days.

The joint action by the IBM UK Pensions Trust and the trustee body of the MNOPF, filed in the US District Court for the Southern District of Texas in May, directly names former BP chief executive Tony Hayward and a number of other senior executives, alleging the company misrepresented BP’s ability to respond to the Deepwater Horizon spill.

The action also alleges Hayward and Douglas Suttles, BP’s former COO, who led the company’s response to the spill, misrepresented the amount of oil leaking into the ocean in the wake of the accident.

In a separate filing from April, Merseyside Pension Fund alleges the “blame for the Deepwater Harizon disaster lies squarely with BP”, with its corporate culture “consistently” emphasising reduced running costs “above protecting lives and the environment”.

It also alleges that the defendants, again including Hayward and Suttles, made “materially false and misleading statements”, both publicly and directly to Merseyside and its investment managers.

The local authority fund further claims that it would not have bought shares in the company “had it known the truth about the matters […] at least not at the prices it paid”, which it said were inflated.

It said it suffered losses and is now seeking to prove the amount of the losses at trial.

All three of the UK funds are represented by US law firms Pomerantz and Abraham, Watkins, Nichols, Sorrels, Agosto & Friend, based in New York and Texas.

The complaints echo those made in another lawsuit, filed by a number of large US public pension funds, Norges Bank and ABP, which claim they relied on BP’s “false and misleading” statements when deciding to acquire BP shares.

Over the period examined by the suit – running from the end of 2007 through June 2010 – ABP said it acquired BP shares more than 125 times from the London Stock Exchange and at least a further 20 times from its New York counterpart.

Similarly, Norges Bank acquired shares more than 280 times from both exchanges over the same period.

Jeremy Liebermann, partner at law firm Pomerantz, told IPE a total of 137 plaintiffs had so far brought claims against BP in the current class action suit.

Discussing the involvement of Merseyside and a number of other UK local authority funds, he said: “The theory is, under UK common law – and that’s quite unique to have a UK common law claim proceed against a company in the US – the court has agreed to exercise jurisdiction over the claim.”

He said there were more than 20 UK funds and asset managers and a similar number of European funds involved in the class action.

“There is quite a large international component in here,” he said.

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