The value of the settlement is estimated by BP to be $7.8 billion, but the reality is that the agreement sets up a program where the actual amount is uncapped. Full damages will be paid. The final amount paid under this agreement will not be known for many years, though the goal of paying for any and all related losses may very well exceed the estimated amount.
Q. What are some of the unique aspects of the settlement?
Probably the most unique aspect of the settlement is the fact that BP will start paying claimants very soon, long before any final approval has been granted by the court. Additionally, the use of geographic zones to determine causation and certain aspects of compensation are also unique to this litigation. A claimant will have to look at more than financial records, but will also require a look at the industry in which they work and the specific location of their business. Geography plays a large role in this settlement, and I can state that these lines of demarcation are designed to compensate fairly all individuals and businesses harmed by the oil spill. Finally, this is one of the few times that a defendant has agreed to pay full damages with limits to all compensable claimants.
Q. How does the settlement compare to Exxon Valdez?
The Exxon Valdez oil spill was vastly different in terms of scope and harm than the BP Oil Spill. That litigation took nearly 20 years before payments were made to people harmed, and in fact, some aspects of that litigation continue today. In contrast, the PSC in this litigation has provided for compensation through settlement in less than 2 ½ years from the time the Deepwater Horizon exploded and sank. Beyond the speed of this resolution, the amount of money dwarfs the funds paid to claimants in the Exxon Valdez litigation. The BP settlement currently in operation will pay for all economic damages for all claimants.
Q. What is your message for critics of the settlement?
Some members of the class have indeed criticized the terms of the agreement. For any and all of those class members that believe they can obtain better results outside the terms of the agreement, they have the option of opting out of the agreement and pursuing their case in court. That being said, I stress the importance of this settlement agreement and the extensive benefits it provides to the vast majority of all potential claimants.
Q. What is the status of the Gulf Coast Claims Facility established by BP?
The GCCF no longer exists, as of Judge Barbiers Order establishing the transition to the settlement procedures. All of the data and documents previously submitted to the GCCF has already been transferred to the Court supervised claims process and will be used in calculating damages awards under the settlement. The GCCF run by Kenneth Feinberg has been closed since the settlement was agreed upon.
Q. What are some of the other unique factors of the settlement?
The most subtle and important aspect of this agreement is that every decision will be supervised by the Court. Any disputes will be decided by the Court itself... very much unlike the GCCF process. Further, this process will be transparent such that each claimant will see the precise formula used to determine the final compensation. If a claimant receives an offer less than expected, they will see why and how that number was determined, and if a challenge is required, they can appeal it first to the claims administrator and then to the Court itself.