The White House has released details about the escrow and claims agreement reached with BP.
BP will contribute $5 billion to the escrow account for four years, reaching a total or $20 billion. The White House emphasized that $20 billion is "neither a floor nor ceiling on liability," merely a starting point.
The account will be used to fund claims by individuals and businesses affected by the spill as well as cleanup costs. Claims will be filtered through an independent process headed by Kenneth Feinberg, the TARP pay czar who also headed the September 11th Victim Compensation Fund.
Feinberg's agency will release standards establishing which claims have legitimacy and evaluate each claim against that rubric. The initial decision can be appealed to a three-judge panel. BP will be bound by law to abide by the agency's final decision.
Meanwhile, BP will also contribute $100 million to establish an unemployment fund for rig workers who lost their jobs due to the explosion.
Individual and business claims will be handled separately from the claims of state and local governments. The latter two will not have recourse to the independent claims process and will have to deal directly with BP.
Cross-posted from Blog Briefing Room.