Recipients of money from BP's 20-billion-dollar oil spill compensation fund will likely be required to waive their right to sue any firm involved in the disaster along the US Gulf Coast, The New York Times reported Friday (link).


Citing internal documents from lawyers handling the fund, the daily said businesses and individuals who accepted compensation from the fund would waive their rights to sue not only the British energy giant, but any company implicated in the largest accidental spill in history.

The waiver would come into effect only if a final settlement is accepted.

The fund, set up by BP at the White House's urging, is being administered by Kenneth Feinberg, who oversaw a similar fund to compensate victims of the September 11, 2001 attacks.

Recipients of money from that fund faced a similar choice: sue, risking a lengthy battle and uncertain outcomes, or waive their right to litigation and accept settlements before the full impact of the disaster is known.

In the case of the spill fund, even though BP is the only firm paying into the compensation account, it is expected to seek a litigation exemption for at least three other firms linked to the disaster, the Times said.

They include Transocean, which leased its Deepwater Horizon rig above the ruptured well to BP; Halliburton, which cemented the well; and Cameron International, which supplied the blowout preventer, the device atop the wellhead that failed to shut the well down after the April 20 explosion that ripped through the rig, sparking the spill.

The Times also reported that compensation eligibility is expected to be based partly on geographic proximity to the spill, potentially cutting out individuals and businesses who suffered serious knock-on financial hardships.

Other potentially controversial provisions prohibit payments based exclusively on declining home values linked to the spill, and compensation based on mental health claims.

Feinberg is expected to release regulations for emergency payments Friday and the final settlement protocols in the fall, with the two terms expected to be similar except for a higher burden of proof in the case of final payments, the newspaper said.