Legal practitioners, valuation experts and industry stakeholders have called for greater consistency, credible evidence and clearly defined standards in the assessment and award of damages, particularly in oil-spill and environmental litigation.
The call was made during Breakout Session XI, titled “Damages & Discretion,” at the Nigerian Bar Association Annual General Conference currently holding in Port Harcourt.
The session interrogated whether Nigeria’s legal remedies are keeping pace with the evolving oil and gas industry, especially as disputes over compensation, environmental responsibility, contractual accountability, regulatory enforcement and host-community rights grow more complex.
Moderator of the session, Mr. Peter Imoh Ekpaidot, described the discussion as an examination of the gaps that continue to plague costly litigation before Nigerian courts. He said the conversation sought practical measures that would promote consistency in damages awards while ensuring that judicial decisions remain firmly rooted in the evidence presented.
Speaking on the management of clients’ expectations, Ama Etuwewe, SAN, warned lawyers against giving clients absolute assurances about the outcome of litigation. He stressed that while counsel must prepare and present cases professionally, they also have a duty to be honest about the uncertainties inherent in court processes.
Where continued litigation appears unlikely to yield the desired result, Etuwewe advised lawyers to guide their clients towards negotiation or settlement. He noted that courts exercise discretion in awarding damages based on the evidence before them, but stressed that such discretion is not a licence to grant windfalls. An unfavourable decision or improper exercise of discretion, he added, remains appealable.
Panelists were united in the view that judicial discretion must be exercised judicially and judiciously, taking into account the law, the evidence and the peculiar circumstances of each case.
On the legal principles governing damages, Emonye Adekwu, SAN, explained that compensation largely revolves around general and special damages. The aim of compensatory damages, he said, is to restore an injured party, as far as money can reasonably do so, to the position he or she would have occupied had the injury not occurred.
Adekwu observed that judges frequently face the difficult task of determining both the category and quantum of damages. Although Nigerian courts continue to apply established principles, he noted that existing statutory provisions sometimes constrain them. He therefore advocated reforms that would empower judges to appoint independent experts in highly technical matters, particularly those involving scientific, environmental and professional valuation evidence. Any fundamental shift in the principles of damages, he insisted, must be backed by clear statutory provisions.
Addressing the peculiar challenges of proving and defending damages in oil-spill cases, Mr. Henry Chigbo identified recurring spills, prolonged disruption of fishing and farming activities, exaggerated claims and inconsistent evaluation reports as major problems.
He explained that oil spills often prevent fishermen, farmers and other community members from earning their livelihoods for extended periods, making it difficult to determine the precise duration and financial value of losses. Collective claims filed on behalf of entire communities without clear individual breakdowns, multiple ownership claims, absence of survey plans and difficulty in identifying the exact geographical area affected were also highlighted as recurring pitfalls.
Mr. Austine Omosigbo emphasised the need for comprehensive assessments immediately after a spill to properly identify the affected land, property, economic activities and persons entitled to compensation.
Panelists underscored the critical role of estate surveyors and valuers in determining oil-spill compensation. They called for the adoption of uniform valuation methodologies and templates to ensure that assessment reports are consistent, transparent and able to withstand judicial scrutiny.
Valuation reports, they said, should be supported by photographs, survey plans, accurate descriptions of affected areas, population data and verifiable information on the economic activities of host communities. They further recommended a definite timeframe within which assessments must be conducted, warning that prolonged delays often lead to the alteration or disappearance of vital physical evidence.
Dr. Moses Owede Vincent noted that compensation ordered against a company does not affect only the immediate parties. Excessive, speculative or poorly calculated awards, he warned, can have wider consequences for businesses, investment and the national economy.
He urged judges to take account of depreciation, inflation and the changing value of money when assessing compensation, while stressing that economic considerations must never be used to deny genuinely affected persons and communities adequate redress for proven losses. Clear standards for estate valuers and other professionals calculating environmental and economic losses were also advocated.
The panelists urged judges to strike a careful balance between protecting affected communities, enforcing corporate accountability and preventing speculative or arbitrary claims. They cautioned against merely reproducing findings or quantum of damages from earlier decisions without regard to the peculiar facts and evidence of each case.
Judicial consistency, they maintained, does not mean awarding identical sums in every matter. Rather, it requires the consistent application of established legal principles to credible and properly evaluated evidence.
The session ended with strong calls for legislative reform, uniform valuation standards, greater use of independent technical experts and a more pragmatic approach to the assessment and award of damages.
As Nigeria’s oil and gas industry continues to evolve, the panellists concluded, the country’s system of legal remedies must also develop to ensure a proper balance between commercial growth, environmental responsibility and justice for host communities.
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