General Motors announces compensation for affected families

General Motors is set to initiate a program to compensate crash victims/ their families affected by faulty ignition switch in their cars. Thus far, at least 13 fatalities have been associated with the said defect. GM would start receiving claims from 1st of August 2014, and issue compensation upon investigation. Policy guidelines and paperwork are pending development by Kenneth Feinberg, a compensation expert.

General-Motors-CEO-Mary-Barra 012After over a decade of ignition switch complaints being reported, General Motors recently issued a recall to replace defective ignition switches of 2.6 million cars. GM claimed that the initial failure reports of those switches were random and diversified, hence they were not linked to suspect manufacturing problem.

Randomly failing ignition switch did not allow for the engine to start in critical situations in unfortunate accidents. Since engine was dead, airbags were not triggered to deploy, making some accidents fatal.

As a consequence to not reporting the ignition switch failure in appropriate time, General Motors was slapped with a $35 million fine, against a Consent Order signed by National Highway Traffic Safety Administration (NHTSA). The fine has been debated in some quarters as not being an adequate penalty.

Kenneth Feinberg victim compensation attorney 01

Kenneth Feinberg (Photo credit: Wikipedia)

In April 2014, General Motors announced the hiring of Kenneth Feinberg, who handled September 11 Victim Compensation Fund, Boston Marathon bombing and BP oil spill cases among others. Feinberg will be speaking with lawyers representing plaintiffs, public interest groups and General Motors officials to take the compensation program forward.

Feinberg also said that he will not be taking part in investigating if the GM situation was caused due to neglect or deliberate cover-up. He will perform only his task of setting up the compensation program. As of now, no specific amount or related information regarding compensation is disclosed.