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GM Agrees to Major Settlement in Faulty Ignition Switch Cases and Criminal Fines

By: Allan M. Siegel

Last month, General Motors reached an agreement to settle up to 1,380 individual death and personal injury claims arising from the faulty ignition switch that had been installed in its vehicles. It is estimated that the 1,380 plaintiffs account for about 60% of the personal injury lawsuits it is facing. It is believed that at least 370 injury victims and families of 84 potential victims who were killed are not part of the deal and will continue to pursue independent lawsuits. The exact settlement amount is unknown at this time, but as part of a deferred prosecution agreement, it has agreed to establish a victim compensation fund that is expected to pay out more than $600 million in awards. Additionally, GM settled a shareholder lawsuit over its handling of the defect. The two settlements account for a $575 million charge on its third quarter of 2015 financial statements.Faulty Ignition

The news of the settlements in the private claims, comes at the same time GM has agreed to pay $900 million in government penalties. The settlement with the government is less than the $1.2 billion that Toyota paid relating to the unintended acceleration cases it faced. Prosecutors cited GM’s cooperation with their investigation as one reason why the penalties were lower.

These settlements are a result of a faulty ignition switch defect that would cause vehicles to shut off, which would also cut off power to air bags – stripping drivers of not only the ability to drive their cars, but potentially lifesaving protections in the subsequent crashes. The defect has been linked to more than 120 fatalities across the country. The defect was first gained significant attention when it was brought to the attention of federal regulators by a Georgia attorney who discovered the defect during a wrongful death suit against the company.

The personal injury attorneys at Chaikin, Sherman, Cammarata & Siegel, P.C., have helped countless victims who have been injured as a result of corporations’ recklessness. Our attorneys know that holding corporations accountable for their reckless conduct is absolutely necessary to protect the public from further injuries. If you or someone you love has been injured as result of a corporation’s negligence, please contact us today for a free consultation.