BP announced it has reached a settlement to resolve the substantial majority of legitimate economic loss and medical claims stemming from the Deepwater Horizon accident and oil spill of April 2010. The settlement, subject to final written agreement, is with the Plaintiffs” Steering Committee (PSC), which acts on behalf of individual and business plaintiffs in the Multi-District Litigation proceedings pending in New Orleans.

BP estimates that the cost of the proposed settlement, expected to be paid from the $20 billion Trust set up to satisfy legitimate individual and business claims, would be approximately $7.8 billion. This includes a BP commitment of $2.3 billion to help resolve economic loss claims related to the Gulf seafood industry.

Prior to the proposed settlement, BP had spent more than $22 billion toward meeting its commitments in the Gulf, according to the company announcement. BP has paid out more than $8.1 billion to individuals, businesses and government entities. In addition, BP has spent approximately $14 billion on operational response.

The proposed settlement does not include claims against BP made by the United States Department of Justice or other federal agencies (including under the Clean Water Act and for Natural Resource Damages under the Oil Pollution Act) or by the states and local governments. The proposed settlement also excludes certain other claims against BP, such as securities and shareholder claims, and claims based solely on the deepwater drilling moratorium and/or the related permitting process.

Under the proposed settlement, class members would release and dismiss their claims against BP. The proposed settlement also provides that, to the extent permitted by law, BP will assign to the PSC certain of its claims, rights and recoveries against Transocean and Halliburton for damages not recoverable from BP.

BP, which employs nearly 23,000 people in the U.S., says the proposed settlement is not an admission of liability.

To read the full BP settlement announcement, click here.