Estimated $7.8 billion to be paid in BP settlement
NEW ORLEANS (Legal Newsline) - Details about a settlement in the Deepwater Horizon trial between BP and the plaintiffs steering committee are beginning to come into focus as sources from both sides of the case have released information on the deal.
Little was known about the proposed settlement when it was first announced via a motion filed late Friday evening by U.S. District Judge Carl Barbier only three days before the trial was set to begin.
In his role as overseer of the omnibus trial, Barbier said the two sides had come to an agreement through talks moderated by U.S. Magistrate Sally Shushan and that the initial phase of the trial would be adjourned pending judicial approval.
A statement released by BP following Barbier's motion revealed an estimated $7.8 billion will be paid to plaintiffs from a $20 billion trust fund set up by the company. Under the settlement proposal, BP would be released from claims by eligible members of the class action who were affected by the 2010 Deepwater Horizon accident that resulted in an estimated 210 million gallons of oil being spilled in the Gulf of Mexico
The proposed agreement would delineate two settlement funds to serve different functions.
One settlement proposal would provide $2.3 billion for economic loss claims from the seafood industry and other economic interests affected by the spill.
The other settlement proposal would go towards medical expenses for workers who were injured in the incident and for healthcare for communities affected by the spill.
Under the medical agreement, those injured in the accident would be eligible for claims based on the severity of their injury as well as being provided services through a 21-year medical consultation program. In addition, BP would provide $105 million over five years directly to health services in the affected communities.
BP asserts the costs may be higher or lower than the $7.8 billion estimate, depending on how the claims process is determined by the court in its final judgment on the matter.
Dallas-based plaintiffs' firm Baron and Budd, who also run an office in Baton Rouge, released a statement regarding the proposed settlements.
"[T]he settlement provides the most benefit for the largest number of people. Its intent is to operate in an efficient and swift manner, providing fairer results than the Gulf Coast Claims Facility," said Baron and Budd attorney Scott Summy.
"It will also have the benefit of strict oversight by the very Court that has overseen this case from the beginning. It's a win for the people and businesses that have been hurt."
BP claims it has already paid out $6.1 billion for over 220,000 claims through the Gulf Coast Claims Facility. The company also states it spent $22 billion in the Gulf communities affected by the spill with $8.1 billion in claims going to individuals and government and business entities and $14 billion devoted to operational expenses.
"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.
Members of the class action will have the opportunity to opt out of the settlement and pursue legal action individually. If a definitive agreement is not reached by the court within 45 days either party will have the ability to void the settlement.
The proposed settlements do not include agreements for ongoing claims from states affected by the oil spill and federal agencies pursuing punitive damages under the Clean Water Act and Oil Pollution Act.