Consumer Law

Plaintiffs' lawyers identify problems with GM compensation plan for ignition-switch accidents

Plaintiffs’ lawyers are criticizing General Motors’ compensation plan for victims of accidents arising from ignition-switch defects.

Lawyer Kenneth Feinberg on Monday revealed details of the compensation plan (PDF) he will oversee on behalf of GM, report Corporate Counsel and the New York Times. Though there is no overall cap on the compensation fund, plaintiffs lawyers identified shortcomings with the plan, the National Law Journal reports.

Feinberg said compensation for a death starts at $1 million, and goes up based on lost earnings and number of dependents, the New York Times says. The plan would not bar compensation for accidents despite liability protection gained in bankruptcy. The company would not consider driver negligence such as intoxication or speeding when compensating victims. Circumstantial evidence would be allowed. Payments would be made quickly, often within 90 days. Victims would not be barred from suing until they accept the payout.

Even victims who received compensation in court could still make a claim. The court award would be deducted from the compensation.

But the plan is limited only to those accidents caused by ignition switch defects in 2.6 million cars recalled in February, and those accidents in which air bags did not deploy, plaintiffs’ lawyers say. GM has issued additional recalls since February, and at this point, accidents due to defects in later-recalled cars are not included. On Monday, GM recalled an additional 8.4 million cars, many of them with an ignition switch defect.

Lawyers also said compensation should not be limited to cases in which air bags failed to deploy. The ignition defect could also result in a loss of power steering, they point out.

Lawyer Lance Cooper told the National Law Journal that the compensation plan will be reasonable in some cases, and not the best option in others. ‘“I think Mr. Feinberg has made a very sincere effort here in trying to come up with what he considers to be an appropriate plan, but it’s limited by what GM is letting him do,” Cooper said.

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