Lawyers from Beasley Allen and other firms representing plaintiffs harmed in crashes involving defective General Motors (GM) ignition switches say they are happy with the automaker’s plans for a victims’ compensation fund to some extent, but concerns remain about whether the fund would adequately punish GM and compensate some of the victims.
GM CEO Mary Barra told a Congressional panel June 18 that the compensation fund would not be capped and that plaintiffs harmed before the company’s 2009 bankruptcy, which diminished much of its liability for pre-bankruptcy crashes, would be covered under the fund.
Ms. Barra directed questions about the compensation fund to Kenneth Feinberg, who has administered giant funds for victims of the BP oil spill, the 9-11 terrorist attacks, and the Boston Marathon. Mr. Feinberg, however, hasn’t made it clear whether victims who draw from the GM ignition switch fund would have to forfeit future legal claims against GM.
GM won’t be on the hook for punitive damages if victims compensated by the fund are barred from taking legal action against GM in court. Plaintiffs’ lawyers believe punitive damages are essential to this case because they say GM knew about the deadly ignition switch problem for more than 10 years but failed to take adequate and meaningful action to fix it.
“… If a jury hears what we know already—and we don’t know everything yet—they will punish General Motors severely without any doubt,” Jere Beasley, founding shareholder of the Beasley Allen law firm, told the National Law Journal.
Mr. Beasley also told the National Law Journal that the compensation fund would be an appropriate source of relief for some victims but not for others.
According to the National Law Journal, the full scope of the ignition switch problem remains unknown. GM has blamed the defect for 54 crashes and 13 deaths, but safety groups and others have said those numbers could just account for a small percent of those affected by the problem.
For instance, GM’s tally of 13 deaths includes only frontal car crashes in which the airbags failed to deploy. In fact, the death of Brooke Melton, a 29-year old nurse who was killed when her Chevy Cobalt suddenly stalled on a Georgia road, isn’t included in GM’s ignition switch toll even though her case blew open GM’s ignition switch defect.
GM has recalled millions of vehicles for the ignition switch flaw, which may allow the key to slip into the “accessory” or “off” position, shutting off the engine’s power and deactivating power steering, anti-lock brakes, and airbags.
Details of the compensation fund are still being negotiated, and several plaintiffs’ lawyers say that they aren’t fully comfortable with some of the terms GM is establishing.
“We know the direction he is leading us into,” Jere Beasley told the National Law Journal, referring to fund administrator Feinberg, “and we’re not sure we like all of it.”