Defective Product Update: GM Ignition Switch Compensation Plan Announced

The New York Times reported today that General Motors announced a plan to distribute money to victims of crashes caused by the faulty GM ignition switch.  The payouts related to the GM recall have a “1$ million starting point” and could total in the billions of dollars. Developed by Kenneth R. Feinberg, the “go-to man” for running the compensation funds for victims of catastrophes, the GM ignition switch plan is “broad and inclusive, and seems certain to account for deaths beyond the 13 that G.M. has publicly linked to the defect.”  There is no cap on the ignition switch fund and apparently GM will not invoke bankruptcy protection to avoid claims before July 10, 2009.

The criteria for claims were described as “flexible” and include victims of rear and side-impact crashes.  The two main criteria are:

(1)        the crash must have involved one of the models of cars that the company has recalled for the defective switch, including Chevrolet Cobalts, Saturn Ions and others (for a complete list see:www.gmignitioncompensation.com); and

(2)        there must be evidence that the air bags did not deploy.

Mr. Feinberg said the compensation plan would look into additional evidence of airbag deployment other than the car’s “black box” computer system.  The GM ignition switch compensation plan apparently accounts for those who were treated for less-severe injuries, including people who have fully recovered. Any claimant that was treated either at a hospital or an outpatient medical facility within 48 hours of the accident is eligible to file a claim. For those claims that are accepted—and there is no guarantee that GM will “accept” the claim—the “formula is $20,000 for one night in the hospital; $70,000 for two to seven overnights; $170,000 for eight to 15 overnights; up to a maximum of $500,000 for 32 or more overnights. People treated on an outpatient basis could receive a maximum of $20,000.” Some families may choose a different review system if they have “exceptional circumstances” that deserve a higher payment.

Importantly, there is a limited time to file a claim: August 1, 2014 to December 31, 2014, so do not delay.  Mr. Feinberg said that filing claim with GM would not prohibit a family from pursuing a lawsuit; only accepting them money would.

Given the flexibility and uncertainty in the GM ignition switch claims process, you should consider hiring an experienced product liability attorney if you were involved in a crash that may have been caused by the faulty ignition switches.  We here at SGB think that our Product Liability Team fits that bill, and would be pleased to speak with you about such a claim.

Defective Product Update: GM Recalls Another 29,000 Vehicles; Possibly More GM Recalls Coming

They just keep on coming for General Motors. According to the Detroit Free Press, GM announced it is “recalling 29,019 Chevrolet Cruzes from the 2013 and 2014 model years because of air bags built with an incorrect part.” GM had ordered its dealers to stop selling the cars earlier this week. The National Highway Traffic Safety Administration said that “some of the Cruzes have a driver air bag inflator built with an incorrect part that could cause the inflator to rupture during a deployment. In a crash, this may cause air bag components to separate and be propelled inside the car, possibly striking occupants. It’s also possible the air bag may not inflate in the case of a crash.”  This defect is apparently unrelated to the now-infamous ignition switch defect that had been tied to 13 deaths, more than 50 crashes, four investigations and the firing of 15 employees by CEO Mary Barra.

Meanwhile, the NBC Nightly News (6/26, story 5) reported that GM CEO Mary Barra said on Thursday that it is “possible there could be even more recalls beyond the 20 million vehicles already affected by this series of problems the company has identified.” The picture will not get any rosier and the New York Times reported that Senate investigators are expanding the scope of their investigation into GM’s defective ignitions, examining Delphi, “the supplier that made the flawed part.”  The supplier is expected to be the subject of a Senate Commerce Committee hearing soon.

If you were in a major collision with significant injuries and the collision involved a GM car, it might be worth your while to consult with an attorney to see if the collision was related to any of the known defects. Here in Washington State, SGB and its product liability and GM defect attorneys are available to investigate the cause of  your motor vehicle accident.

Defective Product Update: GM Ignition Switch Recall

GM announced four new recalls today, including over 500,000 Chevrolet Camaros, due to faulty ignition switches. According to the The Wall Street Journal: “Chief Executive Mary Barra is set to return to Capitol Hill Wednesday to answer questions on why it took the company so long to recall the vehicles. In response to the delay, the auto maker intensified the review of its recall process. The company has now issued 38 recalls covering 16.5 million vehicles throughout North America."  The ignition switch problem is similar to, though said to be different from, the Chevrolet Cobalt problem.  Apparently the Camaro switch can be bumped from the run position to another position that would cut power to the airbags and electronic steering.

Dangerous Product Update: GM to Pay Record Fine

General Motors will pay a $35 million fine to the U.S. Department of Transportation for delaying recalls of small cars with a potentially deadly ignition switch.  According to U.S. Transportation Secretary Anthony Foxx, “people were driving cars with a dangerous safety defect.  Crashes happened, and people died.  What GM did was break the law.” The ten year failure to recall lead to the death of at least 13 people and an ultimate recall of approximately 2.6 million vehicles. Video of the statement is available at USA Today. According to Foxx, the $35 million fine was the maximum penalty under the law.  “Safety is our top priority, and today’s announcement puts all manufacturers on notice that they will be held accountable if they fail to quickly report and address safety-related defects,” said Foxx.

Dangerous Product Update: Toyota Auto Recall

Yet another enormous auto recall was announced yesterday, this time by Toyota. The recall will cover nearly 1.8 million vehicles for numerous defects including air bags that may not inflate. Included in the recall are: the 2009-2010 Corolla; 2009-2010 Matrix; 2008-2010 Highlander; 2009-2010 Tacoma; 2006-2008 RAV4; 2006-2010 Yaris; 2009-2010 Pontiac Vibe (from when GM and Toyota shared a plant); 2006-2010 Yaris hatchback; 2007-2010 Yaris sedan; and the 2008-2010 Scion XD. According to the AP, automakers have recalled about 9 million vehicles in the U.S. already this year.

It is important to recognize that two-pronged safety net of government oversight and civil tort liability are driving these companies to recall these vehicles.  The best case scenario is a recall like this Toyota recall where it appears, through reports from the manufacturer, that the defects have not injured anybody yet. According to the AP, the recent spate of bad publicity and government investigation has resulted in the recalls. Clarence Ditlow, executive director of the nonprofit Center for Auto Safety, said that when faced with this pressure, auto makers “look through their inventory of defective vehicles and recall some of the ones that they had passed over before.”

Even  The Wall Street Journal, which is typically adverse to regulation, recognizes that aggressive regulators and potential for court action have pressured the industry to act, pointing out that the new recalls come weeks after Toyota agreed to settle the criminal investigation conducted by the US Attorney’s Office. There,  Toyota admitted that it mislead consumers by making deceptive statements concerning the two issues that caused  sudden acceleration in conduct that Attorney General characterized as “shameful.”   Under the settlement, Toyota also agreed to pay $1.2 Billion.  This marks the largest penalty ever imposed by the government on a car manufacturer.  I have a feeling that GM is a candidate to surpass that amount.