VANCOUVER - Dozens of passengers who fled a sinking passenger ferry off British Columbia's coast have reluctantly agreed to a legal settlement that will see many walk away with just $500 so they can put that traumatic night behind them, says their lawyer.

James Hanson was asking a B.C. Supreme Court judge Thursday to approve a class-action settlement with BC Ferries that will see about $141,000 split between more than 40 people who escaped the Queen of the North after it struck an island in March 2006. Two passengers died in the sinking.

Hanson said the terms of the settlement left many of the passengers with less than they'd hoped for, but after several years in court, they were done fighting.

"This is a way out, an end," Hanson said in court.

"The general sentiment has been to put this behind them, whether or not the settlement lives up to their expectations, which obviously it doesn't."

The total value of the settlement is $354,000, but about two-thirds of that will be used to pay legal costs that include $54,000 for lawyers' fees and a raft of other expenses such as medical treatment and testing as well as court filing fees.

At least 20 of the passengers will receive just $500, while the rest will get payments ranging from about $1,000 to as high as $35,000.

Hanson said the total figure was reached after "contentious" negotiations with BC Ferries, and then a mediator decided the awards for individual passengers.

"When we concluded it was the last nickel to be wrung out, we did the assessment (with the mediator) that attempted to value each claim," said Hanson.

There were disagreements over some passengers' claims to psychological damages, particularly after a court ruling last year said they must prove a "recognizable psychiatric illness" in order to succeed.

Hanson filed an appeal of that decision but, again, in the end he decided not to take the case to a higher court because of the potential costs and the passengers' desire to move on.

A lawyer for the province's Public Guardian and Trustee, appointed to look out for the interests of eight minors involved, opposed the settlement.

Christine Cunningham outlined several cases of young children who were diagnosed with post-traumatic stress and had experienced nightmares, anxiety and new-found fears of water.

One girl was so scared after the sinking that Cunningham told the court she needed a life-jacket even near shallow water, and she had night terrors about water surrounding her bed.

But Judge Brian Joyce noted the children's parents hadn't objected to the settlement and questioned whether it would be appropriate for him to reject it.

"How is it in the interests of the child to put the child and the parents through further litigation, further stress?" said Joyce.

Joyce reserved his decision.

Fay Clifford, a 79-year-old who was on the ferry with her granddaughter and great-grandchildren, said she's been told she'll get $1,300, minus legal costs.

"It's time to finish it, period," Clifford said in an interview.

"You just try not to think about it, you just try to keep life normal."

Last year, three passengers were awarded amounts ranging from $500 for a minor back injury to $14,000 for a fisherman who says he's now afraid of the water. Their payments are included in the total of the settlement before the court.

Another received $50,000 for a knee injury after reaching her own settlement with BC Ferries, a former Crown corporation that still receives public funding. That amount is not included in the class-action offer.

The families of the two passengers who died have already reached settlements.

Gerald Foisy's two daughters settled their case last year for $200,000 after their lawyer said legal costs were making it impossible to proceed to trial. Shirley Rosette's family has also settled, although the terms weren't made public.

A 2008 Transportation Safety Board report concluded that two crew members on the bridge failed to make a crucial course correction, allowing the ship to run aground.

The report said the navigating officer and a quartermaster had recently ended a relationship and were engaged in a personal conversation while the ship was on its collision course.

This past spring, navigating officer Karl Lilgert was charged with criminal negligence causing death. He has pleaded not guilty.