BP settles lawsuits on Gulf oil disaster

ATLANTA — Global oil giant BP has reached a proposed settlement with the more than 120,000 plaintiffs in the massive civil lawsuit arising from the 2010 Gulf of Mexico oil spill that the company estimates will set it back $7.8 billion.

As part of the settlement announced Friday night, BP will pay people and businesses for their economic losses and medical claims and establish a 21-year medical consultation program for spill victims and the cleanup efforts along the Gulf Coast.

U.S. District Judge Carl Barbier issued an order announcing the agreement between BP, which was in charge of the doomed oil well, and the attorneys for the plaintiffs — a diverse group of fishermen, beachside property owners and restaurateurs, among others, who claimed to be victims of the worst offshore oil disaster in U.S. history.

BP estimated that the deal would cost it $7.8 billion, including $2.3 billion to help the beleaguered seafood industry. The company said it has already spent $22 billion on “meeting its commitments in the Gulf.”

The settlement money will come from the $20-billion trust it established in June 2010 to compensate victims. To date that fund has paid out roughly $6.5 billion. Many alleged victims of the spill rejected compensation offers made by the fund’s administrator, preferring to take their chances in civil court.

The settlement, however, is open not just to those plaintiffs who filed claims before it was reached, but to others who come forward in the future with claims, including potential thousands of residents and cleanup workers who believe they were harmed by exposure to oil or chemical dispersants used in the cleanup, the plaintiffs’ attorneys said.

BP said the settlement would have “no net impact to either the income or cash flow statements.” But it added that it was “possible” that “the actual cost could be higher or lower than this estimate depending on the outcomes of the court-supervised claims process.”

“This settlement reflects our commitment not only to the Gulf region, but also to the United States as a whole,” BP Chief Executive Robert Dudley said.

The plaintiffs’ attorneys issued a statement sketching out the basics of the plan. It asserted that the company was now “obligated to fully satisfy all eligible claims under the terms of the court supervised settlement, irrespective of the funds previously set aside.”

“We are extremely pleased to bring justice to those harmed by the BP Gulf oil spill,” said Stephen Herman and James Roy, the co-lead attorneys for the plaintiffs. “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.”

In Venice, La., fisherman and plaintiff Acy Cooper Jr. said he hadn’t heard all of the details of the deal Friday night. But he said that it had to be good news for a local fishing industry that suffered mightily after the April 20, 2010 accident, when prime fishing waters were cut off to commercial anglers and sport fishermen, and the reputation of the region’s seafood was tarnished worldwide.

“It’s good they settled,” Cooper said. “I didn’t want to wait no 10 years to get our money. This will be better for our industry.”

The settlement will clear up only one aspect of the oil giant’s legal woes. The U.S. Department of Justice is still seeking civil penalties under the Clean Water Act that could reach $17 billion if Barbier determines during the trial that the company acted with “gross negligence,” or a failure to take reasonable steps to avert the disaster. Claims filed by the five Gulf states are also outstanding.

In a statement Friday, agency spokesman Wyn Hornbuckle said the Justice Department was “hopeful” that the private plaintiffs’ claims would “provide swift and sure compensation to those harmed by the Deepwater Horizon oil spill.”

As for the outstanding federal claims, he said the department was “prepared to hold the responsible parties accountable for the damage suffered in the Gulf region. … Although we remain open to a fair and just settlement, we are fully prepared to try the case.”

In his order, Barbier noted that the settlement must be submitted to the court for approval.

He also canceled the opening of the trial in his New Orleans courtroom, which had been scheduled for Monday. Instead, attorneys will gather for a status conference to set a new date and “discuss issues raised by the settlement.”

That would ostensibly give BP more time to arrive at a separate settlement with the federal government, perhaps one that would roll together civil and criminal penalties, said David Uhlmann, a University of Michigan Law professor and former chief of the environmental crimes section of the Justice Department, who has been following the case closely.

Uhlmann contends that the best scenario for BP is to avoid a protracted trial and put the legal mess behind it. On Friday, he said, it had taken an important step toward doing so.

“BP would not be in the kind of talks it was in with the (plaintiffs) if it wasn’t optimistic about its ability to reach a settlement with the state and federal governments so it can avoid a trial altogether,” he said.

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