 "GM compensated only pre-bankruptcy victims")
As General Motors publicly expressed remorse over its decade-long failure to disclose defective ignition switches, it successfully fought to retain its protection from any lawsuits for crashes that occurred before its 2009 bankruptcy.
Instead, GM offered compensation to those victims on its own terms, with a fund run by the lawyer Kenneth R Feinberg and limited to 2.6 million small cars that were recalled in early 2014.
Now the scope of that toll has become clearer: More than 100, or nearly one-third, of the switch-related death and injury claims approved by Feinberg were for accidents that happened before the company's bankruptcy filing. The data was included in the final status report on the GM compensation fund issued early Thursday by Feinberg. The legal strategy had been part of a broader effort by GM, the nation's largest automaker, to move past the biggest safety scandal in its history.
"GM 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. Feinberg said in his report that 399 death and injury claims - out of 4,343 claims filed - were found eligible for compensation. They include 124 deaths, 18 catastrophic injuries and 257 other types of injuries. He said that 128 of the approved claims - or 32 per cent of the total - were for accidents that happened before GM went bankrupt.
While Feinberg declined to comment further on details of the fund, his final report said that GM's potential legal defences were ignored in the process of determining damages. The program "did not consider legal defences that might otherwise be available to GM in litigation, such as contributory negligence, statutes of limitations or the bankruptcy shield."
The report also showed that many claims were settled by the fund despite evidence that the victims were speeding, driving recklessly or under the influence of alcohol or drugs, or not wearing a seatbelt. In all, about 61 per cent of the eligible claims involved one or more factors characterised as "contributory negligence" by drivers of the vehicles, the report said.
For example, the report said that 124 of the eligible claims involved a victim who was not wearing a seatbelt. Excessive speeding was cited in 151 cases, and drug or alcohol use was present in 68 cases. A GM spokesman, James Cain, said on Wednesday that the compensation fund was designed to take a "nonadversarial" approach to settling claims in which people were killed or injured because faulty switches had suddenly cut engine power and disabled airbags in affected models.
GM, he said, decided not to challenge damage awards if other factors, like driver errors, were involved. "We faced the ignition switch issue with integrity, dignity and clear determination to do the right thing both in the short and long term," Cain said. "The settlement facility is just one example." Over all, Feinberg said that he authorised a total of $595 million in payments to the 399 eligible claimants. GM had estimated in its second-quarter earnings report that the final total would be about $625 million. The report said that just over 90 per cent of the compensation offers were accepted by the victims or family members who filed the claims and about 9 per cent were rejected. None of the offers in a death claim were rejected. At least one offer is still under consideration until a January deadline.
Neither GM nor Feinberg has shared any details on specific accidents. Before the compensation fund was started in June 2014, the automaker repeatedly said it had identified only 13 deaths in connection with defective switches since it began recalling affected models in February 2014.
©2015 The New York Times News Service
RESPONSIBILITIES NOT TAKEN?
- GM limited compensation to 2.6 million small cars that were recalled in early 2014
- Kenneth R Feinberg said in his report that 399 death and injury claims - out of 4,343 claims filed - were found eligible for compensation
- 128 of the approved claims - or 32 per cent of the total - were for accidents that happened before GM went bankrupt
