Senators Press GM on Extending Compensation | News | HMG LLP

Senators press GM on extending ignition compensation

August 31, 2017

Source: Detroit News, by David Shepardson

Senators are pressuring General Motors Co. to expand its ignition switch compensation program to other vehicles recalled for defects — and to extend the deadline for accepting offers from the Detroit automaker.

GM chairman Tim Solso met with Sen. Bill Nelson, D-Fla., on Monday, and the lawmaker pressed him to do more for victims even though the meeting was called for reasons unrelated to GM.

"Something went terribly wrong in that company where they were covering up a defect that was lethal," Nelson said, noting he has been a loyal GM owner since he was in college. "You've got to make it right. You've got to do the right thing. ... We don't want to embarrass GM, but until they make it right they need to be.”

Nelson said Solso didn't agree to extend additional compensation.

Solso didn’t immediately return an email message seeking comment.

Nelson and Sen. Richard Blumenthal, D-Conn., called a press conference with Bob Hilliard, one of the lead lawyers for victims and families of those killed in Chevrolet Cobalts, Saturn Ions and other older cars. They pressed the company to extend the amount of time for families to decide whether to accept or reject payment offers. Also present were relatives of one of the victims of a GM ignition switch crash, Jean Averill of Connecticut.

“You are offering them a ‘heads we win, tails you lose’ offer and you have barred the courthouse door,”Blumenthal said, criticizing the fund for only giving families 90 days to decide whether to accept an offer and asking them to abandon the deadlines and waive the bankruptcy shield. “Clearly this problem isn’t going away. I think there’s a strong feeling that there should be some action.”

GM spokesman Jim Cain defended the ignition compensation program and said it had no plans to change the program or extend deadlines. It previously extended a deadline by 30 days to accept claims under Jan. 30 and has reached out in millions of consumer contacts. To date, more than 70 percent of the recalled vehicles have been fixed.

In 2014, GM recalled more than 15 million vehicles for ignition switch-related issues, but only agreed to compensation for a delayed recall of 2.6 million Cobalts, Ions and other cars. Keys can turn off the engine accidentally, disabling air bags, power steering and power brakes.

Hilliard criticized the GM fund for not extending compensation for other ignition defects. He noted that victims of ignition defects from before GM’s exit from bankruptcy in July 2009 as a new government sponsored company are barred from pursuing claims after a federal bankruptcy judge last week upheld GM’s liability shield for crashes before its bankruptcy exit.

Hilliard said the families in crashes before the 2009 bankruptcy exit have little choice but to accept the compensation. “They have nothing else that they can do,”Hilliard said

Under the ruling, a person involved in a crash in 2009 can’t sue, but a person injured in a crash a day after the GM exit could sue. “GM should say, ‘We’re going to pay fair money for every single person involved pre-’09 or post-’09. We will pay everybody that we injured or killed. ... The loss and suffering are exactly the same.”

The GM ignition compensation fund administrator, Ken Feinberg, declined Tuesday to comment on criticism that the fund wasn’t offering enough compensation to the Averill family, since she was 81 and not working at the time of her death.

The fund’s deputy administrator, Camille Biros, said Tuesday that the fund has made 167 offers, with 113 accepted and only 5 rejected. To date, 81 have been paid.

GM’s compensation fund said this week it has approved three additional death claims linked to its delayed recall of 2.6 million cars, raising the latest total to 87 deaths.

GM initially said last year that 13 deaths were related to Chevrolet Cobalts, Saturn Ions and other cars with ignition switches that can inadvertently shut off the engine and disable power steering and air bags. GM delayed recalling the cars for nearly a decade after some within the company became aware there was a problem.

The fund is using a much broader definition to determine if deaths are related to the defect — including pedestrians who may have been killed as a result of a defective GM car.

In total, 4,342 claims were submitted by the Jan. 31 deadline, including 475 death claims. A total of 1,085 claims are still under review, including 71 death claims. A total of 1,335 claims have been ruled ineligible, including 106 deaths. Of the claims, 537 have been submitted without documentation.

A surge in claims before the Jan. 31 deadline means the program will take until at least “very late spring”to rule on all the claims. GM will pay at least $1 million for each death claim.

GM set aside $400 million to pay claims, but said it could be as high as $600 million. The automaker will give a quarterly update on how much it has paid and expects to pay in the program later this week.

Last year, GM CEO Mary Barra testified four times before Congress on recall issues. Congress has largely moved on to other issues and hasn’t made auto safety a top priority this year.

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