class action attorneys, automotive

GM issues final ignition switch Victim Compensation Fund report

All but a dozen families whose loved ones perished in accidents linked to General Motors’ defective ignition switches have accepted a final payout from the independent fund set up last year to compensate victims, bringing total payouts to $595.5 million.

According to a report published online Thursday by GM’s Ignition Compensation Claims Resolution Fund, of the 4,343 claims received, the fund approved and settled 399, including all of the 124 death claims it approved and 16 out of 18 claims for serious injuries. Just one personal injury claimant remains undecided about whether to accept GM’s compensation offer, which will expire on Jan. 6, 2016.

Victims who settle claims through the compensation fund waive their right to pursue lawsuits or seek punitive damages from GM.

The total payout fell just under the $600 million that GM had set aside to resolve the claims, but the car manufacturer’s total costs related to its ignition switch defect have exceeded $2 billion, including a $900-million settlement reached with the U.S. government for its mishandling of the deadly problem, which it concealed from regulators for a decade.

The defective ignition switches affected 2.6 million vehicles made in the U.S. from 2003 through 2011. GM continually covered up the problem, even silencing whistleblowers who voiced concerns about the defect for years, until findings in an early wrongful death complaint threatened to expose the deceit, pushing GM to finally issue a long-overdue recall on Feb. 13, 2014.

The defect allowed the ignition switch to inadvertently shut the engine off with the vehicle in motion, resulting in a loss of power steering, anti-lock brakes, and airbag protection. The problem usually occurred when the ignition key, attached to a keychain bearing other items, jostled out of position as the vehicle traveled over a bump or uneven surface.

While the payouts bring the fund, led by compensation expert Kenneth Feinberg, to a close, GM still faces hundreds of lawsuits filed by victims and families allegedly harmed by the defective ignition switches. Those plaintiffs opted to pursue their claims through litigation and opted out of the compensation fund.

GM’s settlements included 128 claims involving incidents that occurred before the company filed bankruptcy in June 2009, later emerging as a “New GM” without the “Old GM’s” liabilities. GM was not legally obligated to settle those claims, but its insistence that it would “do the right thing” in settling claims brought the carmaker’s ethical standards under close scrutiny.

The carmaker also settled claims that involved unsafe behavior on the driver’s part, such as not wearing a seatbelt, speeding, and falling asleep at the wheel, since those victims would have been better protected had their airbag protection not been shut off by a faulty ignition switch.

The Detroit News

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