BP has reached a settlement to compensate thousands of individuals and businesses impacted by the catastrophic April 20, 2010, oil spill that resulted from the Deepwater Horizon explosion. BP estimates the settlement will amount to approximately $7.8 billion.
The settlement is expected to resolve the majority of private economic loss, property damage and medical injury claims stemming from the oil spill. It remains subject to final, written agreement and is expected to be paid from a $20 billion BP trust, which was established to satisfy individual and business claims as well as other costs related to the oil spill.
According to the Plaintiffs' Steering Committee (PSC), which handled the litigation, BP will fully fund the settlement, there will be no cap on the amount BP will pay and BP will be held fully accountable to individuals and businesses harmed by the spill.
"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," said Bob Dudley, BP Group CEO.
The settlement consists of two separate agreements – one to resolve economic loss claims and another to resolve medical claims. The first compensates private economic losses due to the Gulf oil spill. These loss claims include businesses and individuals that lost profits; sustained damage to coastal property, wetlands and personal property; sustained real property sales losses; lost subsistence use; and have claims for failure to pay under BP's Vessels of Opportunity Program.
The medical portion of the settlement compensates people with medical claims related to the spill and provides periodic medical consultation for the next 21 years. Claimants can participate in either or both settlement programs.
While payments in class action settlements typically are not made until after final approval of a settlement, BP has agreed not to wait for final approval of the economic loss settlement before claims are paid. The economic loss claims process will continue under court supervision before final approval of the settlement.
This settlement does not include claims against BP made by the United States Department of Justice or other federal agencies (including under the Clean Water Act and for Natural Resource Damages under the Oil Pollution Act) or by the states and local governments. It also excludes certain other claims against BP, such as securities and shareholder claims pending in MDL 2185, and claims based solely on the deepwater drilling moratorium and/or the related permitting process.
"We are extremely pleased to bring justice to those harmed by the BP Gulf oil spill," said Stephen J. Herman and James P. Roy, plaintiffs' co-liaison counsel. "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."