GM ignition-switch defect lawsuit reaches $900 million settlement
October 19, 2015
After an investigation by the Justice Department into vehicle defects resulting in more than 120 fatalities, one giant auto manufacturer will pay $900 million to the affected parties. However, General Motors is officially pleading ‘not guilty’ in the case of ignition-switch failures and a purported scheme to cover up the defects.
The U.S. Attorney’s Office is retaining oversight of the case, but if the conglomerate corrects the recall process, the charges will be dismissed from their record in three years. While the original charges included the possibility of prosecuting individual GM employees, that is no longer likely due to the difficulty of assigning blame to someone who was only partially aware of the procedures. However, they government agency has not completely eliminated this option. According to the prosecution, some employees were fired during this process.
Company executives, lawyers and engineers did not address the defect for more than 10 years. In addition, GM confessed that they defrauded customers by advertising the safety of the vehicles despite knowledge to the contrary.
In addition, the auto manufacturer is pursuing a settlement with nearly 1,400 additional victims and has finalized a third settlement in a shareholder lawsuit. Both agreements totaled $575 million in third-quarter losses for a total of more than $2 billion, apart from the expense of repairing 2.6 million recalls. These settlements are in addition to other payments to families of 275 people who were injured and 124 people who were killed. Additional injured and deceased victims are not included in these groups.
The current GM CEO accepted responsibility for the company’s actions and addressed a strategy to correct the defects and move forward with improving the company. Even so, victims in the case expressed their frustration that no one will personally be held accountable for the deaths of their loved ones. The prosecution explained that federal laws do not address the failure to disclose safety defects on vehicles while citing safety concerns for all drivers in the future. A federal report summarizing the findings reached nearly the same conclusions as investigations by the the National Highway Traffic Safety Administration conducted in 2014.
Federal laws place a high priority on consumer safety. If you have been the victim of an accident that was the result of an auto defect, contact our personal injury law firm for seasoned representation.