Articles Tagged with settlement

Unless you’ve been living in exile for the past 4 years, you probably have heard your fill about the BP oil spill and oil rig explosion.  However, a closer look at what happened, and what continues in the settlement process is a cautionary tale for future contract drafters and negotiators (and good news for those with active claims pending against BP).

On April 20, 2010, an explosion on BP’s Deepwater Horizon offshore oil rig caused the deaths of eleven people and the largest oil spill in the industry’s history. After the Deepwater Horizon rig sank, oil leaked into the Gulf of Mexico for an astounding eighty-seven days. This disaster led not only to massive wildlife relief efforts, but also to federal criminal charges and civil claims against BP.

Several investigative groups, following the spill, jointly concluded that BP’s conduct in cutting corners to save money and time—thereby increasing its profit margins—had created an irresponsible and unsafe environment that inevitably bred the tragedy. Knowing reparative action was essential for the company’s survival in the midst of the enormous legal and public relations fallout, BP announced the Gulf Coast Claims Facility (GCCF), a $20 billion fund from which it agreed to settle claims related to the spill. The GCCF began accepting claims in August of 2010. $6.2 billion in settlement funds was paid from this account until June of 2012, when the GCCF was replaced by a court-supervised settlement program.