BP Announces $7.8 Billion Settlement
The proposed settlement consists of two agreements, one to resolve economic loss claims and another to resolve medical claims.
BP announced it has reached a $7.8 billion settlement with the Plaintiffs' Steering Committee -- one that is subject to final written agreement -- "to resolve the substantial majority of legitimate economic loss and medical claims stemming from the Deepwater Horizon accident and oil spill."
The committee acts on behalf of both individual and business plaintiffs in the Multi-District Litigation court case that was scheduled to go to trial March 5 in a New Orleans federal court. The trial has been delayed again, and BP is not the sole defendant.
The committee released a statement confirming the settlement in principle and said there is no cap on the amount BP will pay. Stephen J. Herman and James P. Roy, Plaintiffs' Co-Liaison Counsel, said, "We are extremely pleased to bring justice to those harmed by the BP Gulf Oil Spill. This settlement will provide a full measure of compensation to hundreds of thousands in a transparent and expeditious manner under rigorous judicial oversight. It does the greatest amount of good for the greatest number of people."
"From the beginning, BP stepped up to meet our obligations to the communities in the Gulf Coast region, and we've worked hard to deliver on that commitment for nearly two years,” said Bob Dudley, BP Group's CEO. "The proposed settlement represents significant progress toward resolving issues from the Deepwater Horizon accident and contributing further to economic and environmental restoration efforts along the Gulf Coast."
BP said it expects the proposed settlement will be paid from the $20 billion trust it funded, and the $7.8 billion includes a BP commitment of $2.3 billion to help resolve economic loss claims related to the Gulf seafood industry.
The company said it already has spent more than $22 billion "toward meeting its commitments in the Gulf," including more than $8.1 billion to individuals, businesses, and government entities and $14 billion on operational response.
Its announcement said it is possible the trust will not be sufficient to satisfy all claims upon it as well as those under the proposed settlement. "Should the Trust not be sufficient, payments under the proposed settlement would be made by BP directly," it said. The settlement does not include claims against BP by the U.S. Department of Justice or other federal agencies, by states and local governments, securities and shareholder claims, or claims based solely on the deepwater drilling moratorium. The proposed settlement consists of two separate agreements, one to resolve economic loss claims and another to resolve medical claims. It contains no admission of liability by BP, and the economic loss settlement provides for a transition from the Gulf Coast Claims Facility administered by Kenneth Feinberg.
The Plaintiffs' Steering Committee's statement said the medical claims agreement provides periodic medical consultation for the next 21 years. Claimants can participate in either or both settlement programs. There will be no delay in the processing economic loss claims, it says, while the heart of the claims process shifts to New Orleans, where court supervision will ensure independence, fairness, transparency of process, and accountability.
"Under the new program, eligible claimants will generally be paid greater benefits than under the GCCF," said Herman and Roy.
"This settlement reflects our commitment not only to the Gulf region, but also to the United States as a whole," said Dudley. "BP has operated in America for more than 100 years, employs nearly 23,000 people in the U.S., and invests more in the U.S. than in any other country."