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A year after General Motors first launched a settlement fund for individuals who suffered injuries following accidents involving vehicles with defective ignition switches, which may cause the airbags to be deactivated, the automaker has reportedly agreed to pay at least $1 million in compensation to resolve each of the 124 claims involving wrongful death.
On Monday, an article in the Detroit Free Press reported that the GM victim’s compensation fund had completed its review of 4,342 claims submitted between August 1, 2014, when the fund began taking applications, and the end of January.
General Motors established the victim’s compensation fund last year to address claims filed on behalf of individuals injured or killed in certain Chevy, Pontiac and Saturn vehicles that were sold with defective ignition switches, which may cause the vehicles to suddenly shut off if heavy keychains were used or if the ignition is jarred. The problems may prevent airbags from deploying in an accident, increasing the risk of severe injury.
The final tally for the compensation fund includes 124 eligible wrongful death claims, which will each receive a payout of at least $1 million. That number may go up based on the age of the victim, their salary, parental status and other factors.
The settlement fund also received 277 claims of life-altering injuries, such as brain damage, disfiguring burns, loss of limb, and paralysis. At least 17 of those were eligible for payment.
The bulk of the remaining claims included3,591 submissions for compensation involving less severe injuries. The settlement fund managers have determined that only 257 of those were eligible compensation.
All of the claims stem from GM ignition switch recalls issued in early 2014, impacting about 2.6 million Chevrolet Cobalt, Pontiac G5, Saturn Ion, Pontiac Solstice, Chevrolet HHR and Saturn Sky vehicles from model years 2003-2007.
Shortly after the recall was initially announced in February 2014, it was revealed that some in GM had known about problems with the ignition switches for more than a decade, but the company had failed to take action. The company was eventually fined $35 million by the National Highway Traffic Safety Administration (NHTSA).
By year’s end, about 10 million GM vehicles had been recalled due to ignition switch problems, but the settlement fund only addresses those involving the 2.6 million small cars where the company knew there was a problem beforehand.
The fund was managed independently by Kenneth Feinberg, who also managed the September 11, 2001 terrorist attack victim’s compensation fund, as well as represented businesses hurt by the 2010 BP Deepwater Horizon oil spill.
GM has indicated that it set aside $625 million for the settlement fund in total, and that it has already paid out $280 million of that as of July 17.
The victim’s compensation fund is expected to release a review of its work next week.
GM Ignition Switch Litigation
In addition to claims pursued through the victim’s compensation fund, a growing number of GM recall injury lawsuits are being filed against the auto maker in state and federal courts nationwide. Many of those claims involve similar injuries associated with other recalled GM vehicles that are not part of the compensation fund, as well as claims for diminished vehicle values, investor losses and injuries or deaths that plaintiffs have elected not to pursue through the settlement fund.
Since June, all claims filed against General Motors throughout the federal court system have been consolidated for pretrial proceedings in the U.S. District Court for the Southern District of New York, as part of a Multidistrict Litigation, or MDL. The cases are centralized before U.S. District Judge Jesse Furman to reduce duplicative discovery into common issues, avoid conflicting pretrial rulings and to serve the convenience of the parties, witnesses and the courts..
As part of the coordinated pretrial proceedings in the federal court system, Judge Furman has established a bellwether process for scheduling a series of GM ignition switch trials in the MDL, with the first case expected to go before a federal jury in January 2016.