GM Compensating Pre-Bankruptcy Victims Of Ignition Switch Scandal - O'Connor Acciani & Levy

GM Compensating Pre-Bankruptcy Victims Of Ignition Switch Scandal

December 17, 2015 | By O'Connor Acciani & Levy
GM Compensating Pre-Bankruptcy Victims Of Ignition Switch Scandal

Facing defective product lawsuits regarding faulty ignition switches in more than two million of its vehicles, General Motors (GM) took full responsibility for failing to disclose its prior knowledge of the defective switches. However, the auto manufacturer did not take full responsibility for its liability. Shortly after news broke of the GM ignition switch scandal, the company petitioned the courts for immunity regarding lawsuits for car accidents that occurred prior to the company's bankruptcy in 2009.

Gm's Court-Approved Immunity

Under immunity, a company cannot be held liable for its actions (and is not required to compensate victims), provided the company can sufficiently prove that it was not aware of any risks associated with its actions. Although many individuals felt the ruling was unjust, GM was granted immunity. Immediately thereafter, an appeal was filed by plaintiffs seeking to reverse GM's immunity ruling. However, a judge has since ruled that GM's original ruling will stand. In the meantime, active defective ignition switch lawsuits have been halted. Concerned claimants with pre-bankruptcy accident lawsuits do not know if they will ever be granted compensation for the death of a loved one, property damage or injuries, should General Motors keep its immunity.

Gm's Victim Compensation Fund

Despite its court-approved immunity, GM has created a victim compensation fund in the amount of $595 million. The fund is designed to compensate all ignition switch related accident victims and their families. Attorney Kenneth R. Feinberg is managing the fund and overseeing the payouts. To date, 399 of 4,343 injury and/or death lawsuits have been paid. Of the 399 lawsuits, 124 involved fatalities, 257 involved serious injuries and 18 involved catastrophic injuries. Fienberg has stated that 128 of the lawsuits that have been paid so far were for accidents that occurred prior to GM going bankrupt. By paying some eligible victims, GM is most likely trying to restore their image and move past the ignition switch fiasco. However, although GM's victim compensation fund seems somewhat promising, many pre-bankruptcy claimants continue to wait for a federal court appeals ruling regarding GM's immunity. If you or your loved one has been injured by a defective product, contact an injury lawyer at the law offices of O'Connor, Acciani and Levy today. All consultations are free, and we only get paid if you win.