BP Settlement - Consumer Justice Foundation

BP Settlement

Written by Faith Anderson on March 6, 2012
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BP Settlement is Just the Beginning

According to the U.S. Justice Department, the settlement with BP is not the end of the road. “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 from the Gulf states,” said the agency in a satement.

BP’s payout estimate includes what the oil company internally estimates legal fees for the numerous plaintiffs lawyers will cost, although the issue has not yet been discussed between the two sides. That could be a deal-breaker though for people who have spent nearly two years attempting to receive reimbursement directly from BP or through the Feinberg-run fund that took over the claims process in August 2010. Many affected individuals have been pursuing their claims without an attorney, and therefore have not had to pay legal fees. They may also dislike the idea of possibly having to start their claims process all over again, or at least at the prospect of having their compensation delayed.

According to Feinberg however, the announcement of BP’s settlement is good news. “I point with significant pride and satisfaction to the achievements of the Gulf Coast Claims Facility: reviewing over one million claims submitted by 573,000 claimants and paying some $6.1 billion to approximately 225,000 individuals and businesses in just over 18 months,” he said in a statement. “I believe the GCCF has successfully fulfilled its mandate, and urge an orderly transition to the new proposed claims program.”

Explosion and Oil Spill Kills 11 and Destroys Sections of the Gulf

The Deepwater Horizon disaster and accompanying oil spill soiled sensitive beaches and tidal estuaries, killed wildlife, and closed large areas of the Gulf to commercial fishing. The suits consolidated in federal court in New Orleans were filed by fishermen who were out of work, cleanup workers who got sick, and others who claimed to have been affected by the oil company’s 2010 disaster. The settlement will have no cap to compensate plaintiffs, although BP estimated that it would have to pay out $7.8 billion, making it one of the largest class-action settlements ever. BP still has to settle claims filed by the U.S. government, the Gulf states and its partners on the Deepwater Horizon rig, which exploded and sank 50 miles after a BP oil well below the ocean’s surface blew out. Eleven rig workers were killed in the explosion, and more than 200 million gallons of oil spewed into the ocean before the well was capped nearly three months later. The remaining claims could cost BP billions more.

Federal Regulators Report: BP to Blaim for Gulf Spill

The main targets of litigation resulting from the explosion and oil spill were BP, cement contractor Halliburton Co., Transocean, and Cameron International, maker of the well’s failed blowout preventer. BP was leasing the rig from Transocean. The Justice Department sued some of the companies involved in the explosion, seeking to recover billions of dollars for environmental and economic damages. The department also launched a criminal investigation, although the probe hasn’t yet resulted in any charges. The companies also sued one another; in one of the pending lawsuits, BP has sued Transocean for at least $40 billion in damages.

In January 2011, a presidential commission found that the spill was caused by a series of poor decisions made by BP, Transocean and Halliburton in an attempt to save time and money. The panel found that, while these mistakes created unacceptable risk, they were the result of systemic problems, not necessarily the fault of one individual. In September 2011 however, a team of Coast Guard officials and federal regulators issued a report concluding that BP was ultimately responsible for the spill. According to the report, BP violated federal regulations, ignored critical warnings and made poor decisions during the cementing of the well a mile beneath the Gulf of Mexico. BP has accepted some responsibility for the spill and says it will pay what it owes, urging the other companies to do the same. Transocean and Halliburton, however, have rejected opportunities to settle their claims with BP and pay billions of dollars in damages. “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,” said Transocean in a statement. 

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