BP, plaintiffs reach $7.8 billion settlement over Gulf oil spill

BP has reached a multi-billion dollar settlement with thousands of people and businesses harmed by the massive 2010 spill that dumped over four million barrels of oil into the Gulf of Mexico, parties to the deal announced late Friday night.

The proposed agreement is hardly the end of the legal road for the oil giant, which still faces Justice Department environmental charges and a criminal probe over the April 2010 blowout and resulting months-long spill, among other legal woes.

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BP, in a statement, said the proposed settlement would resolve a “substantial majority of legitimate economic loss and medical claims,” and estimated the costs of the un-capped deal would be $7.8 billion, including $2.3 billion to help meet Gulf seafood industry losses.

"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 CEO Bob Dudley said in a statement. 

Attorneys for the umbrella Plaintiffs’ Steering Committee said the proposed 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.”

The deal will “fully compensate hundreds of thousands of victims of the tragedy,” the group said.

The settlement comes just days before Monday’s scheduled start of a sweeping, multi-party trial over the spill.  

Judge Carl Barbier of the U.S. District Court for the Eastern District of Louisiana issued a short order Friday night noting that the first phase of the trial, due to the settlement, is adjourned and that a new date would be set.

He noted that the proposed settlement “would likely result in a realignment of the parties in this litigation and require substantial changes” to the current trial plan.

The deal announced Friday has two components. The first addresses economic losses faced by businesses and individuals. 

“These 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,” according to a summary of the deal released by the plaintiff group.

The second part addresses medical claims related to the spill.

The agreement does not include federal Clean Water Act, Oil Pollution Act or natural resource damages claims against BP brought by the Justice Department and other agencies, or claims by state and local governments, BP noted.

A Justice Department spokesman, in a statement to The New Orleans Times-Picayune and other outlets, said the department is “hopeful that the resolution of the private plaintiffs' lawsuit will provide swift and sure compensation to those harmed by the Deepwater Horizon oil spill,” while noting that federal attorneys are pressing ahead with other claims.

"With regard to the United States' outstanding claims, and as Attorney General Holder recently testified before Congress, the United States is prepared to hold the responsible parties accountable for the damage suffered in the Gulf region,” spokesman Wyn Hornbuckle said.

“The United States will continue to work closely with all five Gulf states to ensure that any resolution of the federal law enforcement and damage claims, including natural resources damages, arising out of this unprecedented environmental disaster is just, fair and restores the Gulf for the benefit of the people of the Gulf states,” he said.

The company faces billions of dollars in Clean Water Act penalties and other fines in relation to the blowout of the Macondo well, disaster that killed 11 people aboard the Deepwater Horizon rig.

BP also remains embroiled in a battle with Transocean Ltd., the owner of the Deepwater Horizon rig that was drilling BP’s ill-fated Macondo well, and well cementing contractor Halliburton, over the costs of the disaster.

“Delays or deals made by other players do not change the facts of this case and we are fully prepared to argue the merits of our case based on those facts,” Transocean spokesman Lou Colasuonno told Bloomberg News.

The disaster prompted the Obama administration to issue a controversial months-long moratorium on new deepwater drilling permits and led to the overhaul and toughening off offshore drilling rules.

BP has already spent more than $22 billion as a result of the disaster, the company said, including more than $8 billion paid to individuals, businesses and government entities and roughly $14 billion responding the accident.