BP's $7.8 bln deal may speed payments for U.S. spill

Sat Mar 3, 2012 7:51pm GMT

* Oil giant still faces other claims for compensation

* U.S. Justice Department says is ready to go to trial

* Lawyers could get higher fees as result of settlement

By Andrew Longstreth and Tom Bergin

NEW YORK/LONDON, March 3 (Reuters) - The estimated $7.8 billion deal struck by BP Plc with businesses and individuals suing over the massive 2010 Gulf of Mexico oil spill could speed up payments to thousands of claimants and offers lawyers a potential windfall in legal fees.

London-based BP announced the deal on Friday with the Plaintiffs' Steering Committee (PSC), which represents condominium owners, fishermen, hoteliers, restaurateurs and others who say their livelihoods were damaged by the April 20, 2010 explosion of the Deepwater Horizon drilling rig and subsequent oil spill.

The settlement, which delayed a giant trial that had been set to get underway in a New Orleans federal court on Monday, is a step by BP toward resolving its liability in the case, which stretches into the billions of dollars. However, the deal does nothing to settle charges brought by the biggest player in the trial: the U.S. government.

Eleven people died and 4.9 million barrels of oil spewed from the mile-deep (1.6 km-deep) Macondo oil well is by far the worst offshore U.S. oil spill.

U.S. District Judge Carl Barbier in an order late on Friday delayed the trial, saying the settlement "would likely result in a realignment of the parties in this litigation and require substantial changes" to the trial plan.   Continued...

Powered by Reuters AlertNet. AlertNet provides news, images and insight from the world's disasters and conflicts and is brought to you by Reuters Foundation.