GM Recall Settlements Talks Have Begun for Injury, Death Cases

General Motors (GM) has begun preliminary discussions about a potential settlement agreement that would provide a compensation fund for individuals injured in automobile accidents involving the 2.6 million Saturn, Pontiac and Chevrolet vehicles recalled earlier this year, due to ignition switch problems that may cause the vehicles to suddenly shut off and for the airbags to fail to deploy.

A growing number of GM injury lawsuits are being pursued in state and federal courts throughout the country, including allegations that accidents were caused when the vehicles suddenly shut off or that injuries could have been prevented if the airbags had deployed.

In February, GM first announced that it was recalling nearly 800,000 vehicles due to problems with the ignition switch if heavy key chains are used or if the ignition is jolted, such as may occur during a crash. The problems may cause the airbags to fail when needed. The recall has since been expanded to include more than 2.5 million vehicles, and evidence has emerged that suggests GM knew about the problems for years without acting.

Only weeks after the recall was initiated, reports suggest that preliminary settlement talks have already begun between GM and attorneys representing injury and death victims. According to a report by the Wall Street Journal, GM is considering an injury compensation fund that would treat all claimants equally, regardless of when their accident occurred, but no firm agreements are in place.

While talks on injury settlements are progressing, GM continues to fight against claims brought by vehicle owners who allege that they have suffered economic damages due to lost value to their vehicles caused by GM’s failure to warn them about the problem or fix it, despite knowing about it for years.

On May 2, U.S. Bankruptcy Judge Robert Gerber placed a stay on economic claims against the company. GM has argued that the decisions leading to the recall were made before its 2009 reorganization, maintaining that the new company should not be held liable for the actions of its previous incarnation. However, Judge Gerber is also investigating whether the company committed fraud during the 2009 bankruptcy proceedings, which may allow the lawsuits to proceed.

According to allegations raised in both the injury and economic loss claims, GM has known about the problem and actively tried to conceal the issue by blaming incidents on driver error. GM officials have admitted that the company failed to act in a timely manner, and has apologized to customers and claims it seeks to compensate those injured or killed.

While GM has indicated that at least 13 deaths may have occurred due to airbag failures caused by the faulty ignition switch, outside experts suggest that many more serious injuries and deaths appear to have occurred. A report by the Center for Automobile Safety suggests that more than 300 deaths have been reported to federal regulators following accidents involving some of the recalled vehicles where airbags failed to deploy.