GM won’t limit ignition switch crash compensation

WASHINGTON (AP) — The attorney overseeing General Motors’
compensation to victims of small-car crashes says there’s no limit to
what the company will pay, provided the crashes were caused by faulty
ignition switches. The tally could climb into billions of dollars.
GM
links 13 deaths to defective ignition switches in cars such as the
Chevrolet Cobalt and Saturn Ion. But trial lawyers and lawmakers say
hundreds of others could file claims of wrongful death and injury.
Kenneth
Feinberg, one of the country’s top compensation experts, said Monday
that GM has placed no cap on the total amount he can pay to injured
people or relatives of those killed. And he alone — not GM — will decide
how much they each will get, even though he is being paid by the
company, which did not like some of the program’s provisions.
Feinberg
would not estimate the ultimate cost for GM, saying he has no idea how
many claims will be made. But based on the methodology he plans to use, a
large number of claims could raise the total settlement into the
hundreds of millions of dollars, if not billions.
"GM has
basically said whatever it costs to pay any eligible claims under the
protocol, they will pay it. There is no ceiling," Feinberg said at a
news conference in Washington.
Feinberg’s remarks came on the same
day that GM added 8.2 million vehicles to its ballooning list of cars
recalled over faulty ignition switches.
However, GM spokesman Alan
Adler said victims in the newly recalled vehicles would not be included
in the compensation fund that has been set up for the small-car case.
GM considers the latest recalls a separate issue and ineligible for the
fund.
With the plan, GM is trying to limit its legal liabilities,
control the damage to its image and eventually move beyond the crisis
caused by its failure to correct the ignition-switch problem for more
than a decade, even as it learned of fatal crashes. The company recalled
2.6 million older small cars earlier this year to replace the switches.
Only
those hurt in crashes caused by the small-car ignition switches are
eligible, so the program excludes other GM safety problems. Claims will
have to prove that the switches caused the crashes. Once a claim is
settled, victims give up their right to sue the company.
Claims
can be filed from Aug. 1 to Dec. 31. Once the filing is complete,
Feinberg promises payment in 90 to 180 days in most cases. People who
previously settled lawsuits with GM are eligible to apply for more
compensation.
Feinberg said he will not consider whether those
injured in crashes contributed to the cause by drinking alcohol,
speeding, not wearing seat belts or other behavior. But GM could use
that as a defense if the cases go to trial, he said.
"We have no interest in evaluating any alleged contributory negligence on the part of the
driver," he said.
In
many cases, the cars involved have been destroyed, and it will be
difficult to determine if the switches caused the crash, Feinberg said.
"Unlike
the 911 fund or the BP oil spill fund, many of these accidents occurred
years ago," Feinberg said. He urged those seeking compensation to use
police, hospital, insurance and auto-repair records to buttress their
claims. If the accident vehicle is still available, that’s even better,
he said.
Feinberg said that he’s willing to meet privately with any crash victims or their families.
That’s
"easily the most difficult part of this assignment," he said. "It is
very stressful, but it is essential because there are family members who
want to be heard."
Legal experts say GM has almost no defenses
left in crash lawsuits because it conceded the switches are defective
and that its employees were negligent in failing to recall the cars. A
GM-funded probe by an outside attorney blamed the delays on a
dysfunctional corporate culture and misconduct by some employees. The
company has dismissed 15 workers in the case.
The ignition
switches can slip from the "run" to the "accessory" position,
unexpectedly shutting off the engines. That knocks out power steering
and brakes and can cause drivers to lose control. In addition, the air
bags won’t inflate because of lack of power. Feinberg said if the air
bags inflated, that negates a claim because that means the crash wasn’t
caused by the switch.
Laura Christian, who lost her daughter in a
2005 accident, attended the news conference. She said she had evidence
that 165 people have died in accidents caused by the ignition-switch
problem. She also said there is evidence in some cases that the driver
succeeded in restarting the vehicle moments before the crash, leading to
air bag deployment. She asked if Feinberg would consider such cases.
"I will be glad to consider anything you have," Feinberg said.
Christian, of Harwood, Maryland, said she was undecided on whether to file for compensation or go to
court.
"Some
of us are going to feel a need to litigate whether it’s about finding
an answer or making this so expensive that GM and other automakers will
never do this again," she said.
Feinberg will limit payments to
people with less-serious injuries, based on how long they stayed in the
hospital, similar to the way he compensated victims of the Boston
Marathon bombings. But there is no cap on potential payments to
relatives of those killed and people with catastrophic injuries that
caused brain damage, amputation, serious burns or paralysis.
GM
said in a statement that Feinberg’s plan shows it is taking
responsibility for what happened to victims "by treating them with
compassion, decency and fairness."
Feinberg acknowledged that some people will question his fairness, given that he was hired by GM.
"The only way you overcome that problem," he said, "is by demonstrating through the awards
that the program is fair."
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Krisher and Auto Writer Dee-Ann Durbin reported from Detroit.