One year after General Motors’ victim compensation fund began accepting death and injury claims related to its massive ignition switch issue and six months after the submission deadline, the carmaker announced it had completed its review. Now, instead of acknowledging just 13 deaths tied to the deadly defect, the car manufacture is admitting that 124 deaths – nearly 10 times the original tally – resulted from its failure to address the problematic switches in more than 2.59 millions of vehicles.
The Detroit News reports that the company-appointed review team responsible for vetting the death and injury claims completed its review this week after receiving 4,300 death and injury claims over the last year.
In addition to the 124 death claims, the fund approved 274 injury claims, of which 17 were considered serious.
While the death and injury claims are much higher than GM previously acknowledged, the fund ultimately rejected 91% of all submitted claims — 338 of which were for deaths.
Additionally, although the initial review process is over, many of the approved claims have yet to be assigned a dollar figure for their individual proposed payouts, according to an administrator for the fund.
Of the victims and survivors that have been given offers, 100 are still outstanding – having either been rejected or not yet accepted, the Detroit News reports.
So far the company has paid out about $285 million in compensation for the approved claims. When all cases are closed, GM expects to pay $625 million related to the fund.
Despite the conclusion of the funds’ review process, consumer advocates continue to raise concerns on how compensation was doled out to victims.
Clarence Ditlow, executive director for the Center for Auto Safety, tells the Detroit News that the fund likely worked against consumers by requiring a burden of proof that was too high.
“The entire program was designed to get help get Congress and the Justice Department off GM’s back,” Ditlow said. “The one thing is clear that we will never know how many people were killed or injured because it goes back so far.”
A Texas lawyer suing GM over the defect maintains that the compensation fund doesn’t account for all injuries and included “clunky and unfair” provisions, such as only providing relief for those who stayed overnight in the hospital.
“Many of my clients were fortunate enough not to suffer severe bleeding or other open-wound type injuries, but ended up having surgery months later because of neck/back injuries. As they were sent home from the emergency room and not admitted — [the fund] does not allow for consideration of the surgeries. This led to a gross unfairness for many and a very small offer,” he tells the Detroit News.
According to the plan’s formula, families of those who died are entitled to at least $1 million, plus the calculation of lifetime earning lost, and $300,000 for a spouse and for each dependent.
In a hypothetical scenario provided by GM the family of a 25-year-old married woman with two children who was earning $46,400 a year at the time of her accident would receive $4 million.
Consumers who suffered life-altering injuries could receive even more when the cost of lifetime medical care, lost earnings power and other factors are considered.
The plan also addressed consumers who faced less-severe injuries. Those who were treated at a hospital or an outpatient medical facility within 48 hours of the accident are eligible for a claim.
The formula for that claim is $20,000 for one night in the hospital; $70,000 for two to seven overnights, $170,000 for eight to 15 overnights, with a maximum of $500,000 for 32 or more overnights. Those treated on an outpatient basis could receive a maximum of $20,000.
While the conclusion of the review process closes the door on a portion of GM’s decades-year-long ignition switch debacle, the issue is far from settled for the car maker.
The Department of Justice continues to look into bringing criminal charges against the car company for allegedly making misstatements about the ignition switches in the Chevy Cobalt, Saturn Ion and other vehicles.
As Consumerist previously reported, the exact charges that might be filed are still up in the air, as is the issue of whether GM will go along with a guilty plea, or perhaps a deferred-prosecution deal. Either result would also result in a sizable settlement payment, which is another issue to be sorted out, but would likely be north of $1 billion.
Individual employees could also face charges from the DOJ. Some at the company knew before the affected cars even went into production that there was a problem with the ignition switch. It could be inadvertently turned into the “Off” position by a heavy keychain or if the driver’s knee came into contact with the switch.
GM ignition fund ends review approving 124 death claims [The Detroit News]
by Ashlee Kieler via Consumerist
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