Lawyers for local business owners say deal, to be approved by US district judge, 'holds BP fully accountable for tragedy'

BP and lawyers for the businesses claiming damages in the Gulf of Mexico oil disaster have finalised the details of a multi-billion dollar settlement and submitted it to a judge in New Orleans.

The proposed settlement, which includes economic and medical claims, must be approved by US district judge Carl Barbier. He has scheduled a closed-door conference on the proposal on 3 May.

More than 100,000 shrimp boat captains, condo owners and other small business owners are suing BP for economic losses during the spill. Lawyers for those plaintiffs claimed victory on Wednesday.

"The people and businesses of the Gulf coast stand to reap great benefits from these settlements," lawyers James Roy and Stephen Herman said in a statement. "We have held BP fully accountable for the Deepwater Horizon tragedy less than two years after the spill. Through extensive arms-length, good-faith negotiations, hundreds of thousands of Gulf coast residents and businesses will be made whole."

The two sides reached a deal last February – on the eve of what was anticipated to be a long and costly civil trial to assign liability for the 2010 disaster.

BP said last month it expected to pay about $7.8bn to settle claims. But the plaintiffs' lawyers said on Wednesday there was no cap on economic and property damages. The statement from the plaintiffs also said that BP had agreed to pay $2.3bn to compensate commercial fishermen, shrimp boat captains, and oyster farmers.

The Obama adminsitration welcomed news of the deal. Ken Salazar, the interior secretary, said the proposed settlement was a "solid start" to ensuring that BP and other companies involved on the Deepwater Horizon are held acocuntable for the spill.

The proposed settlement would be paid out of the $20bn fund set aside by BP in the summer of 2010 to compensate victims of the oil disaster. The fund has about $14bn left, but even if it is exhausted, BP will have to continue to settle claims, the plaintiffs' lawyers said.

If Judge Barbier approves the deal, BP will avoid a long and costly civil trial on liability for the oil spill. The settlement does not involve the federal government, which could seek fines of up to $17.6bn under the clean water act, or the state governments of Louisiana and Mississippi, which are also seeking damages.

The arrangement worked out between BP and plaintiffs' lawyers also does not include the oil company's partners on the Deepwater Horizon oil rig, which experienced a fatal blowout on 20 April 2010, killing 11 men and spewing millions of barrels of oil into the Gulf of Mexico.

(By Suzanne Goldenberg, Guardian.co.uk, 18/04/2012)