$200 Million Settlement for Canada Railroad Disaster Victims

January 13, 2015 — The Montreal Gazette reports that a $200 million settlement has been approved to compensate victims of a 2013 railroad disaster in Canada.

The derailment occurred on July 6, 2013, in the town of Lac-Mégantic, Quebec, population 6,000. The train was carrying crude oil and set off several explosions that wiped out part of the downtown core of the city and killed 48 people.

Lawsuits accused the railroad company of negligence for transporting crude oil in the flawed DOT-111 tanker cars, which have been known to rupture during derailments since a safety study was published in 1991.

The settlement funds will be divided among family members of those who died, as well as people who were injured, suffered economic losses, or property damage. Insurance and government claimants will also receive a share of the payout.

The settlement was provided by Montreal Maine and Atlantic Canada Co., its insurance company, railroad tanker car manufacturers, and some oil producers. Lawyers will also pursue additional settlements with parties who have not yet contributed to the fund.

The mayor has stated that the settlement is only a fraction of what is needed. Currently, only about $50 million is approved for wrongful death claims, $19 million for injuries, and $29 million for property damage. About 52% of the fund will go to the government. However, that percentage could change if the settlement amount increases.

It is possible that the settlement will be “significantly higher” when it is finally approved. According to Robert Keach, the appointed trustee for the bankruptcy of Montreal Maine and Atlantic Canada Ltd. (MMA):

“Due to the diligence and respect by all parties associated with this plan in Canada and the United States, we have put forward a favorable resolution. With continued diligence by all parties, the settlement amount will be significantly higher.”

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