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Incentives for Negotiating Superfund Settlements

There are many reasons why a potentially responsible party (PRP) would prefer to enter into a settlement agreement with EPA instead of being ordered to do the work. EPA offers several incentives for settlement with PRPs that are outlined below.

Settlement Incentives

Incentives Overview

Contribution Protection

Settling parties receive protection from contribution claims made by non-settling parties. The scope of the contribution protection is discussed in the consent decree or administrative settlement.

Covenants Not to Sue

A settling party's present and future liability is limited according to the terms of the consent decree or administrative settlements.

Mixed Funding

Generally, mixed funding refers to "pre-authorized" mixed funding, in which the settling parties agree to do the clean up and EPA agrees to finance a portion of the costs (which EPA will try to recover from non-settlors).
Orphan Share Compensation

Orphan shares are the shares of cleanup liability attributable to insolvent or defunct parties. For example, if there are ten PRPs at a site, and one of them is insolvent, then the orphan share is one-tenth of the estimated cleanup cost. EPA's orphan share compensation policy, however, allows EPA to not pursue some or all of the orphan share from parties that are willing to sign a cleanup agreement. Because Superfund liability is joint and several, EPA could require the liable, solvent parties to pay the orphan share, too. [More information is available from the orphan share compensation category of the Superfund cleanup policy and guidance document database.]

Potentially Lower Costs of Cleanup

Potentially responsible parties generally can perform the cleanup for less money than it would cost EPA to perform the cleanup and therefore it is in the PRP's interest to perform the cleanup. If EPA performs the cleanup, EPA will pursue the PRPs to pay EPA's costs back after the cleanup is done.

Special Accounts

If EPA settles with some PRPs before settling with other PRPs to do the cleanup, EPA may deposit the money from that early settlement into a Superfund site-specific special account. Special Account money may be available as part of a settlement package for parties willing to sign a cleanup agreement. [More information on Superfund Special Accounts.]

Suspended Listing

For sites that qualify to be listed on the National Priorities List, but are not yet listed, EPA will not pursue listing the site if parties sign a Superfund alternative approach cleanup agreement.

Additional information for Superfund negotiations and settlement procedures is available in the Superfund cleanup policy and guidance database.

Learn More: Financial Assurance in Superfund Settlements