Victims of the catastrophic oil spill that took place in the Gulf of Mexico in 2010 may soon receive compensation for their damages. BP – the defendant in the massive class action litigation – and plaintiffs are both recommending approval of the proposal class action settlement.
According to this article, the judge presiding over the case, U.S. District Judge Carl Barbier, heard arguments on November 8 from the lawyers who negotiated the deal, along with other lawyers who have objected to parts of it. BP estimates it will pay $7.8 billion to resolve the pending claims, but since the settlement is not capped, BP could pay out more or less.
Judge Barbier does not have the authority to rewrite the settlement; rather, his role is to determine whether the settlement is “fair, reasonable and adequate.” He plans to rule in the near future. However, he said some of the objections he heard were “frankly, not made in good faith and bordered on being frivolous.”
Judge Barbier preliminarily approved the settlement agreement in May, but since that time, thousands of people have opted out of the settlement to pursue individual claims. Nonetheless, the number of plaintiffs who have opted out of the class settlement is less than BP anticipated.
According to Jim Roy, a lead plaintiffs’ attorney, the settlement could resolve more than 100,000 claims, but it doesn’t resolve separate claims brought by the federal government and Gulf Coast states against BP and its partners on the Deepwater Horizon drilling rig, which involve environmental damage. The settlement also does not resolve claims against Switzerland-based rig owner Transocean Ltd. and Houston-based cement contractor Halliburton.
According to the proposed settlement, BP has agreed to pay $2.3 billion for seafood-related claims by commercial fishing vessel owners, captains, and deckhands – an amount that BP indicates is nearly five times more than the average industry revenue between 2007 and 2009.
The proposed settlement also requires BP to pay for medical claims by cleanup workers and others who have suffered illnesses from exposure to the oil or the chemicals used to disperse it. BP has also agreed to spend $105 million over five years to set up a Gulf Coast health outreach program and pay for medical examinations. BP would also pay up to $600 million in fees, costs, and expenses to a team of plaintiffs’ attorneys who negotiated the settlement.
The class action lawsuit against BP stems from the April 2010 explosion at BP’s Macondo oil well that killed 11 rig workers and spilled more than 200 million gallons of oil into the Gulf. Following the disaster, BP created a $20 billion compensation fund for Gulf Coast residents and businesses. The Gulf Coast Claims Facility paid out more than $6 billion to about 221,000 claims before a court-supervised administrator, Patrick Juneau, began overseeing the claims process earlier this year. BP agreed to continue paying claims pending Judge Barbier’s decision on the proposed.