Now it gets complicated.
The late-night announcement on Friday of a proposed $7.8 billion deal in the BP civil trial is not the end of the case, but the beginning of a new phase with many unanswered questions.
The next steps in the process will take time, and the terms of the settlement itself will have to be approved by Judge Carl J. Barbier. Plaintiffs will be able to opt out of the settlement. It is far from over.
The proposed settlement between BP and the group of lawyers appointed to lead the litigation for individual and business plaintiffs will shut down the current claims process and create a new fund, administered by the court. It will use money set aside by BP within the $20 billion escrow fund that was being used to pay claims of economic loss and other expenses.
The unanswered questions include: Will the federal government be next to settle? And what will happen to the people who have current claims pending at the Gulf Coast Claims Facility?
The federal claims stand to be far larger than those of private claimants, and could bring billions of dollars into the United States Treasury in civil environmental fines under statutes like the Clean Water Act, and potentially even more in criminal penalties.
Wyn Hornbuckle, a Justice Department spokesman, said the deal with private plaintiffs leaves much to be done. “We are pleased that BP may be stepping up to address harms to individual plaintiffs, but this by no means fully addresses its responsibility for the harms it has caused,” he said.
Nothing in the Friday deal, Mr. Hornbuckle said, “compensates the public for the significant damages to its natural resources and environment, and BP has yet to pay a penalty for its violations of law.”
In a statement on Friday, he said, “Although we remain open to a fair and just settlement, we are fully prepared to try the case.”
Kenneth R. Feinberg, who has administered BP’s compensation fund, praised the deal, calling it “good news,” and saying “it avoids a lengthy, complex trial and uncertain appeals.”
Mr. Feinberg, whose fund has evaluated more than one million claims from nearly 600,000 people and businesses, has paid out $6.1 billion to more than 225,000 of them. He urged “an orderly transition to the new proposed claims program.”
Whether that transition will be orderly is another of the open questions. In some ways, delays that often occur in such settlements will be minimized: while defendants in class actions usually do not pay out settlements until final approval by the court, BP has agreed to continue paying claims throughout the process.
Still, elements of the rough outlines of the proposal before the judge already have some plaintiffs’ lawyers grumbling. Anyone who currently has an offer of settlement payment from the Feinberg fund will receive only 60 percent of that money right away, and will have to join the broader lawsuit to receive the rest, though plaintiffs will then be able to choose the original offer if they prefer.
“Under the new program, eligible claimants will generally be paid greater benefits” than under the current claims facility, said Stephen J. Herman and James P. Roy, who serve as liaison counsel for the plaintiffs.
In an interview, Mr. Herman said, “We appreciate everything Mr. Feinberg tried to do. It was a challenging situation. But it’s time for a new program.
“We’re hoping that there won’t be that many bumps in the road and the claims process will be much improved.”
Daniel E. Becnel Jr., a Louisiana lawyer who has chosen to move most of his clients through the Feinberg fund, expressed skepticism about that element of the deal, saying that it seemed that the goal of the new process was to siphon more people into the settlement process. “It looks like it’s all about fees,” he said, and he predicted, “You’re going to have a lot of opt-outs.”
Under the proposed agreement, fees for work already done by the plaintiffs’ team are expected to be paid by BP and will not come from individual plaintiffs, though those plaintiffs might be billed for additional work in preparing their claims.
Initial business reaction to the proposed deal was positive. “It’s a good thing for BP because it is a good step forward,” said Nancy T. Schmitt, president and partner at Taum Sauk Capital Management, a hedge fund.
“It took Exxon 20 years to settle the Exxon Valdez,” she added. “It looks like a fair deal and a step in the right direction. And, as an investor, that’s what you want to see.”
Some, however, said they would have been happier to see the case go to trial, where the mistakes and decisions that led to the gulf disaster could be brought to light.
Brian Moore, the legislative director of the National Audubon Society, said, “It’s the largest Clean Water Act violation we’ve seen in our nation — maybe those things should be talked about publicly, and not privately.”