LONDON -- BP Plc and the Plaintiffs' Steering Committee (PSC) confirmed that the U.S. District Court has adjourned the start of the civil trial over the April 2010 Deepwater Horizon accident and oil spill by one week, until Monday, March 5. This adjournment is intended to allow BP and the PSC more time to continue settlement discussions and attempt to reach an agreement.
BP and the PSC are working to reach agreement to fairly compensate people and businesses affected by the disaster in the Gulf of Mexico.
"There can be no assurance that these discussions will lead to a settlement agreement," the company cautioned.
BP and the plaintiffs are discussing a $14 billion accord that would be funded with money originally set aside by the company for out-of-court settlements, people familiar with the talks told Bloomberg.
BP would agree to close down its $20 billion Gulf Coast Claims Facility (GCCF) and shift the remaining $14 billion to plaintiffs who contend the spill harmed their businesses and properties, the people said. A deal with the plaintiffs would not include potential pollution fines. BP set up the GCCF in August 2010 to allow spill victims to receive compensation more quickly than by pursuing lawsuits. The fund has paid out about $6 billion so far, according to its website.
The Macondo well blowout put more than four million barrels of oil into the gulf over 87 days, making it the largest offshore spill in U.S. history. The disaster spawned hundreds of lawsuits against BP and its partners, including Transocean Ltd., the Vernier, Switzerland-based owner and operator of the Deepwater Horizon drilling rig, and Houston-based Halliburton Co., which provided cementing services at the facility.
"They could be about 90% or 95% done and now they have to go that last yard, which is always the toughest," Carl Tobias, who teaches mass-tort law at the University of Richmond in Virginia, said of the proposed accord. "There could be an awful lot of money that is still in play or provisions that are hard to swallow for one side or the other," he told the news agency.
The progress in settlement discussions allowed BP to persuade a federal judge in New Orleans to delay a multibillion-dollar liability trial over the spill that was set to begin today. They asked for extra time to allow talks to continue, the company and plaintiffs said in the joint statement.
The discussions between the plaintiffs and London-based BP are nearing completion, said the people, who declined to be identified because they were not authorized to speak publicly.
Ellen Moskowitz, a spokesperson for BP, declined to comment on the proposed accord beyond the joint statement. David Falkenstein, a spokesperson for the lead plaintiffs' lawyers in the case, did not return Bloomberg calls seeking comment.
The proposed agreement would be separate from BP's talks on fines with government lawyers, who have sued over pollution claims tied to the spill, the people said. They declined to predict when any settlement would be announced.
U.S. District Judge Carl Barbier, who will preside over the trial, now scheduled to start on March 5, must rule whether BP can expect other firms involved in the spill to help pick up the tab for the estimated $26 billion in costs spawned by the sinking of the Deepwater Horizon rig.
If there isn't a deal reached by all sides, the judge must determine whether the companies should pay punitive damages to thousands of business and property owners, and fines to the government for polluting the Gulf of Mexico.
The proposed settlement would allow plaintiffs' lawyers to use the GCCF money to set up a system for compensating spill victims based on the type of harm they suffered, the people familiar with the talks said. The system likely would be similar to those used to decide recoveries in class-action cases, they said.
As of February 24, the fund has paid out almost $6.1 billion to individuals and businesses claiming damages from the explosion and oil spill, according to GCCF's website.
Attorneys for some victims argued in court filings that officials of the fund, run by Washington-based lawyer Kenneth Feinberg, used "coercive tactics" to force business and property owners to accept inadequate payments for their claims and give up their rights to sue.
While lawyers for plaintiffs whose cases have been consolidated before Barbier for pre-trial proceedings proposed the $14 billion settlement, attorneys for other spill victims are likely to oppose the accord as inadequate, the people familiar with the talks said.
The proposed settlement would not resolve any claims between BP, Transocean and Halliburton over financial liability for handling of the Macondo well and the subsequent explosion of the drilling rig, which killed 11 workers, the report said.