BP has introduced a reverse auction into its latest panel tender process, an announcement which comes in the same week as the energy giant lost an appeal to restrict access to its $20bn compensation fund for the Deepwater Horizon disaster. The FTSE 100 company confirmed this morning (22 May) that it has issued invites to existing and potential panel member firms, and revamped the process with the introduction of an online reverse auction element to make the bidding process more transparent, quicker and efficient.
The current panel includes Magic Circle firms Linklaters and Freshfields Bruckhaus Deringer, as well as Norton Rose Fulbright, Olswang, Herbert Smith Freehills, Field Fisher Waterhouse, CMS Cameron McKenna and Pinsent Masons.
Managing counsel Andrew Stewart, who is leading the UK panel process, said: ‘We’re reviewing our UK core panel of eight firms and would expect some changes there based both on rates and previous performance.
‘We would expect to see some new participants for our UK-instructed legal work, and it is possible that there may be some departures.’
While criteria for the 2014 panel is set to include ‘capability’ and ‘quality of legal service’, the FTSE 100 company is also placing a strong emphasis on cost efficiency and competitive rates.
Group general counsel Rupert Bondy (pictured), who steered the 2011 panel overhaul, added: ‘Financial discipline is a key part of BP’s strategy – that applies to our legal spend as much as project investments.’
A process is also underway to ‘realign rates’ for BP’s US legal panel during 2014.
The review is expected to be completed towards the middle of 2014.
BP last year revealed that a $20bn trust set up to satisfy claims for damages from the Deepwater Horizon spill had nearly all been paid out, and on Monday (20 May) lost an appeal in its US court battle to ensure that claimants against the fund show adequate causation.
The company is now seeking review by the US Supreme Court to prevent billions of dollars of additional liabilities for ‘losses with no apparent connection to the disaster.’
Yesterday (21 May) it said: ‘No company would agree to pay for losses that it did not cause, and BP certainly did not when it entered into this settlement. BP will continue to fight to return the settlement to its original, explicit, and lawful purpose – the compensation of claimants who suffered actual losses due to the spill.’
Recently it emerged that in 2010 BP paid external legal fees of $1bn in respect of the disaster.