GM won't limit ignition switch crash compensation

Published on NewsOK Modified: June 30, 2014 at 4:36 pm •  Published: June 30, 2014
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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.