The WSJ today reports that the Obama administration, joined by the likes of Harry Reid, the Senate Majority leader, is pushing BP to set up a separate compensation fund to answer to the damages that the spill will have caused others. This proposal drips in irony in light of the fact that one of the pillars of the Democratic left is the plaintiffs' lawyers bar. The proposal ignores them, these hired-guns who are already into the fray, ready, willing and able to take BP to the woodshed. It ignores a victim-favorable legal system similarly ready, willing, and able to supply the lumber.
But instead of the courts determining legal liability and damages in adversary proceedings, the Administration proposes . . . whom? Undoubtedly, when this proposal gets fleshed out, there will be some sort of political board applying rules that it makes up while it goes along, playing favorites along the way.
This is what happened to GM. Instead of allowing GM to descend (ascend?) to the bankruptcy court in an unfettered way, we had a political intervention so that the unions, of all interests, would be protected - the unions, whose work rules helped send that company into insolvency.
What we have is a "rule of men" developing, and we move away from a rule of law. Another irony is that a so-called US Constitutional scholar (who, as far as we know, never wrote anything on the subject) leads the charge.
UPDATE: The President during his televised speech on June 14, spoke of the "BP compensation fund." The next morning, the WSJ editorial writers commented as follows:
Tellingly, Mr. Obama declined to cite any legal authority for the escrow [BP Compensation] fund, about which he plans to "inform" BP CEO Tony Hayward tomorrow. We don't believe the President has the power to force a corporation to set aside money for future, undetermined and open-ended obligations. It is a precedent fraught with potential for abuse.
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