[JURIST] British Petroleum (BP) [corporate website] on Friday announced an estimated $7.8 billion class action settlement [press release] to resolve the majority of claims [materials] filed by individual and business plaintiffs after the 2010 Deepwater Horizon oil spill [BBC backgrounder; JURIST news archive]. The proposed settlement comprises two separate agreements between BP and plaintiffs, one to resolve economic loss claims and another to resolve medical claims, and each is expected to be paid out of the $20 billion compensation trust established by BP in the wake of the disaster. However, the settlement includes neither claims against BP made by the US Department of Justice and other federal agencies, nor by states and local governments. The deal also excludes certain other claims against BP, such as various pending securities and shareholder claims, and claims based solely on the deepwater drilling moratorium or the related permitting process. Additionally the proposed settlement provides that class members would release and dismiss their claims against BP, and that BP will assign to the plaintiffs certain of its claims, rights and recoveries against Transocean and Halliburton for damages not recoverable from BP. The proposal will next be submitted to Judge Carl Barbier of the US District Court for the Eastern District of Louisiana [official website] for final approval. The settlement does not constitute an admission of liability by BP.

Earlier this week Barbier postponed the multi-billion dollar trial [JURIST report] over the Deepwater Horizon oil spill, hours before the trial was set to begin, in order to give BP more time to reach an agreement with plaintiffs. Last month Barbier issued an order that BP will be held liable for a portion of the damages owed by Transocean [JURIST report] as a result of the disaster. Transocean is the company that owned the Deepwater Horizon oil rig that was contracted by BP and subsequently caused the oil spill. BP will be required to indemnify Transocean against damages created by the pollution itself that are awarded throughout the litigation pending against it. BP will not be required to pay an punitive damages or civil fines as a result of these suits. The court did not rule as to whether BP or Transocean would be held strictly liable, negligent or grossly negligent for the equipment failure and subsequent oil spill that created the pollution. The ruling is separate from an August ruling by Barbier permitting punitive damages against BP [JURIST report], but that ruling pertained to claims brought against BP directly.