BP announced that it has reached a $7.8 billion settlement proposal with the individual and business plaintiffs represented by the Plaintiffs’ Steering Committee (PSC), to resolve economic loss and medical claims stemming from the Deepwater Horizon accident and oil spill.
The company said that it expects to pay the PSC medical and economic claims – including $2.3 billion to help resolve economic loss claims related to the Gulf seafood industry – from $20 billion set aside for the Deepwater Horizon Oil Spill Trust, and expects no net impact to its income statement, which has so far incurred a total of $37.2 billion from the spill.
The trial, which combines civil complaints by individuals, companies and governments, and cross-claims among defendants, was postponed indefinitely, FuelFix said.
Prior to the proposed settlement, BP said it had spent more than $22 billion towards meeting its commitments in the Gulf. BP has paid out more than $8.1 billion to individuals, businesses and governments, and spent about $14 billion on operational response.
The Financial Times said that the settlement process, which includes placing advertisements in newspapers and magazines to inform people of their rights, could lead to more plaintiffs than the 116,000 that lawyers have estimated had joined the litigation so far.
BP said that if claims were greater than the Trust’s assets, the company would make payments directly. The proposed settlement also provides for BP, to the extent permitted by law, to assign to the PSC certain of its claims, rights and recoveries against Transocean and Halliburton for damages not recoverable from BP.
BP Group CEO Bob Dudley said the proposed settlement represents significant progress toward resolving issues from the Deepwater Horizon accident. But BP and other corporate defendants – including Transocean and Halliburton – still face civil claims from federal and state governments related to possible violation of pollution laws, and the Department of Justice is conducting a criminal investigation. Transocean and Halliburton have not settled with the business and individual plaintiffs, FuelFix said.
Transocean, which owned and operated the Deepwater Horizon but maintains its position that BP made key decisions leading up to the disaster, and Halliburton, which cemented the well, had no immediate reaction, FuelFix said.
Business Week reports that Justice Department officials are open to the possibility of settlement as well as prepared for a trial, while BP said the company is prepared to seek a settlement with the U.S. and state governments.