BP to pay £4.8bn for oil spill losses

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A judge in New Orleans has approved a deal likely to cost BP $7.8bn.

A US judge has given final approval to BP’s $7.8bn (£4.8bn) part settlement with businesses and individuals who suffered losses following its disastrous Gulf of Mexico oil spill.

The settlement resolves most private individual’s claims for economic loss and property damage, but it doesn’t cover lawsuits brought by the US government or those brought by the states of Alabama and Louisiana.

US District Judge Carl Barbier in New Orleans granted final approval to the settlement after he considered objections following its preliminary approval in May.

Some 13,000 out of the more than 100,000 individuals involved in the class action lawsuit had challenged the settlement.

“None of the objections, whether filed on the objections docket or elsewhere, have shown the settlement to be anything other than fair, reasonable and adequate,” Judge Barbier said.

The agreed deal “provides compensation to class members that appears sufficient” to cover their losses from the spill, Judge Barbier said. The plaintiffs include restaurateurs, hoteliers, and oyster men who lost money following the blowout.

The explosion on the Deepwater Horizon rig in April (Paris: FR0004037125 - news) 2010 caused the worst offshore oil spill in US history. BP (LSE: BP.L - news) has already agreed to pay $4bn in fines and penalties to resolve all criminal claims with the Department of Justice the largest criminal settlement in US history.

The oil giant will also plead guilty to 11 felony charges of manslaughter over the deaths of the men lost when there was a blowout on the Deepwater Horizon rig.

“We believe the settlement, which avoids years of lengthy litigation, is good for the people, businesses and communities of the Gulf and is in the best interests of BP’s stakeholders,” a BP spokesman, said.

“Today’s decision by the court is another important step forward for BP in meeting its commitment to economic and environmental restoration efforts in the Gulf and in eliminating legal risk facing the company,” the spokesman added.

“We are extremely pleased with the court’s ruling,” Steve Herman and Jim Roy, the joint lead counsel for the plaintiffs, said. “This settlement has and will continue to - bring the people and businesses of the Gulf the relief they deserve.”

Last month a settlement with the US government was announced, in which BP agreed to pay $4.5bn in penalties and plead guilty to felony misconduct.

The government also charged the two highest-ranking BP supervisors aboard the Deepwater Horizon with 23 criminal counts including manslaughter.

BP said the settlement is not expected to result in any additional charges that would add to the $37.2bn it has already written down to cover the cost of the spill and its aftermath.