GM Approves $594.5 million to Compensate 399 Victims of the Faulty Ignition Switches
The latest data released by the compensation fund shows that many of the victims, especially families whose loved ones died due to a car accident, were awarded compensation regardless of the driver’s potential reckless behavior, such as failing to wear a seat belt or speeding. Many were also awarded money for crashes which occurred prior to 2009, even though General Motors does not have to compensate families or victims involved in crashes which occurred before the automotive manufacturer filed for bankruptcy.
A judge previously ruled that “new GM,” which was formed after the 2009 bankruptcy case, was not responsible for “old GM’s” decisions. However, the GM ignition switch problem involved older model vehicles, many of which dated back to 2004 and 2005, before GM filed for bankruptcy.
The automobile company has officially approved $594.5 million to compensate 399 victims of the faulty ignition switches. The company has spent $2 billion on the problem so far, including a $900 million settlement with the Department of Justice, since the fund was set up in June 2014.
GM came under fire after attempting to quietly recall around 250,000 older model vehicles in February 2014. When the manufacturer admitted that it knew about 13 deaths and several more serious personal injuries related to ignition switch faults that caused car crashes, the company came under investigation by reporters, government officials, and the public.
Reports from the compensation fund say that 91% of the awards have been accepted by victims. The fund has so far accepted 399 death and injury claims out of 4,343 claims filed. Of the accepted claims, 124 were for wrongful death, 18 involve catastrophic injuries, and 257 other types of injury caused by car crashes due to faulty ignition switches. More than 100 of those claims were for crashes that occurred prior to GM’s bankruptcy filing, which the automotive manufacturer noted was an attempt to regain some good public standing.
“G.M. stepped up to its responsibility for the ignition switches, but they made a decision to limit their larger financial exposure to pre-bankruptcy cases,” said Cindy Schipani, a law professor at the University of Michigan.
“We faced the ignition switch issue with integrity, dignity and clear determination to do the right thing both in the short and long term,” said James Cain, a spokesman for GM. “The settlement facility is just one example.”
About 9% of the compensation offers have been rejected by victims. Several active ignition switch lawsuits are being held up in court. When the judge upheld GM’s bankruptcy ruling which split the company into old and new GM, the lawsuits were rejected, but the group has issued an appeal to a higher court. Meanwhile, some families are still trying to decide whether they will accept GM’s compensation offer, or aim for litigation.
“We wanted to have our day in court with G.M.,” said Ken Rimer, whose stepdaughter, Natasha Weigel, was killed in an accident caused by a faulty ignition switch. “But we figured that was never going to happen.”