GM denies 91% of claims, while another ‘ignition’ scandal brews

For more than a year, Kenneth Feinberg, the attorney who oversaw fund payouts for BP, September 11 and other events, has been poring over thousands of claims against General Motors, for deaths and injuries caused by the company’s faulty ignition switches. Feinberg and his team have finished processing the 4,343 claims and have approved only 9% – or 399 – of them. According to the deputy administrator of the compensation fund set up by GM, Camille Biros, the other claims were rejected because they “couldn’t support any connection to the ignition switch.”

By mid-December last year, only some 2,300 claims have been filed and of those, 100 had been approved while the rest were still being reviewed or pending additional information. By the time February rolled around, the number of claims had almost doubled to 4,343 – 474 of them were linked to fatality. Initially, GM said it knew of only 13 deaths caused by the faulty ignitions, but Feinberg’s analysis showed that the actual number was nearly 10 times more.

Anyone of the 399 approved claimants receiving payments is “required to execute a release of all present, past, and future claims against GM and all other potential defendants arising out of the Ignition Switch Defect prior to receiving any money”. In other words, if you take the money, you have to drop your lawsuit against GM, and never sue them again.

There is no cap on the payout but GM has set aside US$650 million. Although Feinberg’s team has not released the amounts that are expected to be paid to these claimants, Washington Post reported that death claims carry a US$1 million payout, plus US$300,000 for surviving spouses and dependents. Add to that injury claims and lifelong treatment and care for some, the final payout could very well use up the entire Fund and then some; not forgetting other lawsuits that will probably follow, which GM will have to fend off in court, including by those whose claims have been denied.

Another scandal could be brewing in the automotive world, following GM’s faulty ignitions and Takata’s errant airbags. Last Wednesday, ten of the world’s leading automakers were sued by American consumers for concealing the dangers of keyless ignitions. According to the complaint which was filed in LA Federal Court, drivers leave their vehicles, believing that the engine will automatically switch off without the electronic key fobs. At the very least, this reduces the vehicles resale values, according to the plaintiffs; at worst, this causes injury or death for people who were exposed to carbon monoxide poisoning. In the USA, about 430 people are killed from accidental CO2 poisoning each year.

The defendants include BMW (including MINI), Mercedes Benz, Volkswagen (including Bentley), Fiat Chrysler, Ford, General Motors, Toyota (including Lexus), Honda (including Acura), Nissan (including Infiniti) and Hyundai (including KIA).

The lawsuit, filed by 28 plaintiffs, seeks to hold the automotive industry accountable for defects that could make driving dangerous. It claims that the automakers have long been aware about the risks of keyless ignitions, yet have claimed that their vehicles were safe. The feature was introduced into cars in North America from at least as far back as 2003, and the plaintiffs claim that at least 13 deaths and many more injuries have been caused by it. GM and Ford have, in fact, taken steps to patent a automatic shut-off feature for idling engines which, according to the plaintiffs, can be inexpensive to install. Since 2009, the NHTSA has received 27 complaints about keyless ignitions.


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