General Motors Co. is offering to pay out several million dollars to families of deceased victims or victims that were seriously injured due to a faulty ignition switch installed in 2.6 million small cars, the company announced Monday.
Kenneth Feinberg, a lawyer and compensation specialist, has been hired by the automotive powerhouse to design and administrate the fund. He, not GM, will have the final say as to who gets paid and how much.
The company, thus far, has linked 13 deaths and 54 accidents to the faulty ignition. It remains to be seen how many deaths or injuries will be compensated, but considerations for injuries include paralysis, severe burns or amputation.
Compensation will be based on age, earning potential, medical expenses and family obligation. In the case of a 10-year-old paraplegic who was crushed in an accident caused by the defect, the fund is offering 7.8 million dollars. Victims with less severe injuries will be compensated based on how long they have been hospitalized or receiving medical attention that began within 48 hours of their accident. Totals for these victims range from $20,000 to $500,000, but there is no cap on potential compensation.
GM has acknowledged that company officials were aware of this ignition issue more than a decade before recalls began in February of this year. The defect causes the car to randomly shut down, leading to stiff steering and brakes and causing the airbags to fail deployment.
In this case, the claim process will even consider victims who suffered an accident due to additional factors such as speeding, texting or talking on the phone. As long as they qualify, GM will compensate them within three months. “Texting [and] speeding [are] irrelevant to this program,” Feinberg said. “We have no interest in examining any alleged contributory [role] on the part of the driver.”
The fund will begin accepting claims on August 1, 2014 for up to five months ending December 31, 2014.
