Announced earlier this month, BP and the lawyers for plaintiffs in the trial over the 2010 oil spill in the Gulf of Mexico have agreed to settle their case. According to reports Judge Carl J. Barbier of Federal District Court in New Orleans issued an order late Friday night stating that the two sides “have reached an agreement on the terms of a proposed class settlement which will be submitted to the court.”
BP’s explosion aboard the Deepwater Horizon rig in April 2010 killed 11 rig workers and began a spill that for months spewed millions of barrels of oil into the Gulf of Mexico, fouling beaches, killing wildlife and disrupting the economies of Gulf Coast States. This settlement includes economic damages and provides compensation of medical services for victims of the 2010 disaster along the coast. $7.8 Billion in compensation does not seem much considering the damage, the lost, homes, business, and boats, and lost lives — from cancers, fetal deformities, and what other diseases it might bring in the future.
However, this settlement does not include their biggest plaintiff, the federal government or the state and local government along the coast.
It’s very surprising though that BP did not have to pay punitive damages, since BP failed to have emergency oil spill containment ready to roll, which BP was required to do after the Exxon disaster. Instead of having oil booms ready within 5 hours as a condition of the drilling, it took the US Navy and 5 days to get these in place. With the extensive damage to the coral reefs that is now being reported, and new articles that have brought to light that half of the dolphin population in the gulf is showing signs of sickness. Though reports show all sides have said they are ready to go to trial, the incentives to settle have been enormous.
A severe financial punishment in addition to paying for damages might also have an impact on future safety measures. David M. Uhlmann, who headed the Justice Department’s environmental crimes section from 2000 to 2007, said, “The plaintiffs’ steering committee really needs to reach a settlement with BP” because otherwise it could face years of litigation and might obtain less at trial than it could receive in a settlement. We agree that by settling BP can avoid a trial and possible exposure of the true story of the Gulf Coast disaster.
Should BP take this catastrophic loss case to court or settle?