GM Recalls Ignition Switches

Last year, on February 7, 2014, General Motors Co. recalled approximately 800,000 vehicles. The recall was later expanded with over 600,000 vehicles on February 24, and over 820,000 vehicles on March 28. In all, GM recalled a total of nearly 2.6 million cars, all due to problems with the ignition switch which inadvertently shut off the engine and disabled the power steering and air bags. This recall finally came after nearly a decade of someone in the company becoming aware of the problem.

GM then created a compensation fund for the victims of the faulty ignition switch, administered by Kenneth Feinberg, a compensations expert who previously worked on the 9/11 Victim Compensation Fund and the BP Deepwater Horizon oil spill. Victim’s of the faulty ignition switch were encouraged to apply to the program for compensation, if their claims were found eligible, and were told that all eligible claims would receive whatever compensation deemed appropriate, with no cap on the final amount in total. Feinberg also stated that anyone who settled with the company prior to the implementation of the program, was allowed to ignore the settlement and apply to the fund for further compensation.

The ignition switch compensation fund began accepting claims on August 1, 2014, and amassed nearly 4200 claims by the deadline of January 31, 2015, nearly 3000 of which were found to be either ineligible, lacking sufficient documentation or filled with no documentation. As of March 23, 2015, the compensation fund has approved 126 injury claims and 74 death claims, with more than 1,300 claims still to review, 95 of which include deaths. Once an offer for compensation is made by the fund to a victim or victim’s family, should they accept it, though they are not required or obligated to do so, they will be bared from further legal action against the General Motors.