GM ignition fund ends review approving 124 death claims

David Shepardson
Detroit News Washington Bureau

The final death toll blamed on defective ignition switches in General Motors cars is 124, according to a company-appointed review team that over the past year considered more than 4,300 death and injury claims. That’s nearly 10 times more than the 13 deaths GM executives reported as the controversy unfolded in 2014.

In addition to the death claims, and with just a half-dozen injury applications still to be reviewed, GM’s compensation fund said Monday it approved 274 injury claims — 17 of them serious.

While the fund has reviewed the 4,342 claims filed against GM — rejecting 91 percent of them — it has not yet determined the value of some of the deaths and injuries, or made offers to the victims or their survivors, said Camille Biros, the fund’s deputy administrator. Among the 3,665 rejected claims, 338 were for deaths.

One hundred offers are outstanding, not yet accepted or rejected by those to whom they were made. Biros said victims or survivors have 90 days from receipt of an offer to decide if they will accept it. Many of the accepted offers, she said, still have not been paid “pending releases and/or other required payment documentation.”

“When these statistics are available, they will provide a complete picture of the status and success of the program,” Biros said.

GM announced its ignition fund in June 2014 and it began accepting claims on Aug. 1, 2014. The claims deadline was Jan. 31.

When all cases are closed, GM expects it will have spent $625 million in compensation to those to whom offers have or will be made; it already has paid out $280 million in claims.

Clarence Ditlow, executive director of the Center for Auto Safety, said the “burden of proof on the individual consumer was always too high,” and that some may not have pursued claims because they didn’t have supporting documents.

“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.”

The ignition defect caused the engines in some vehicles to stop running, disabling power steering and air bags. Because accident investigators, for a decade, didn’t know of the flaw and may have attributed wrecks to other factors, it’s impossible to say how many accidents, deaths and injuries were truly the result of the bad part.

Texas lawyer Robert Hilliard, one of the lead lawyers suing GM over ignition defects, said Monday he has a mixed review of the compensation program, noting that the amount of some compensation awards was tied to hospitalization — a provision he called “clunky and unfair.”

He said some injuries were back- and neck-related “as you are slammed into the steering wheel and no air bag deploys.”

“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 — Feinberg does not allow for consideration of the surgeries. This led to a gross unfairness for many and a very small offer,” Hilliard said.

The fund is directed by lawyer Ken Feinberg, who has administered funds for victims of the 9/11 attacks, Boston Marathon bombing, Virginia Tech shootings, BP Deepwater Horizon Gulf oil spill and other tragedies.

GM is paying at least $1 million in each death claim and gave Feinberg and his staff the final decision on approving or rejecting all claims. It placed no cap on the amount Feinberg could award, but he is not allowed to assess “punitive” damages.”

He plans to release a report this month on the program that is expected answer some key questions about the program, including why it rejected nine of every 10 claims as well as demographic characteristics of those that were approved.

Feinberg declined to comment Monday ahead of the report’s release.

Wrapping up the compensation is a major milestone as GM looks to put the deadly ignition switch crisis in its rearview mirror. The program’s completion also will end what’s become an irritation within GM: the weekly Monday morning reports by Feinberg’s office of deaths and injuries approved and rejected. They have drawn significant media attention over the months.

The U.S. Justice Department, meanwhile, is nearing a decision on whether to charge GM criminally in connection with a decade-long delay in admitting to the problem and recalling affected cars, even though some within the company were aware of it. GM also could face a fine expected to top $1.2 billion — the amount Toyota Motor Corp. paid last year after it was charged with wire fraud. A decision is expected by the end of summer or fall.

Several reports have suggested it is unlikely that individual GM employees will be charged — or that the government will seek to charge GM with bankruptcy fraud. GM is most likely to be charged with wire fraud as part of a settlement — similar to the charge Toyota faced.

The bad switches resulted in the recall of 2.59 million cars, mostly Chevrolet Cobalts and Saturn Ions with ignition switches that can inadvertently shut off the engine and disable power steering and air bags. GM says that as of July 20 it had repaired 73.5 percent of the 2.59 million vehicles repaired, leaving 619,667 to be repaired.

GM also faces hundreds of lawsuits stemming from faulty part, including 100 U.S. class-action lawsuits and 21 in Canada from owners who say the recalls reduced their value of their vehicles.

The automaker also faces 172 U.S. suits and nine in Canada over injury or death claims; those are separate from the compensation claims.

There are also suits pending by GM shareholders.

The first trial stemming from the dozens of suits filed against GM and consolidated in front of a federal judge in New York is set to start in January. Lawyers are deposing dozens of current and former GM executives, including GM CEO Mary Barra set for October and former CEO Rick Wagoner in September.

In April, a federal bankruptcy judge ruled that GM — which became a new company in July 2009 as part of a government-backed bankruptcy restructuring — largely has a “shield” that prevents it from being sued for crashes that took place before its exit from bankruptcy. Despite the shield, GM extended the compensation program to cover all crashes related to the ignition defect.

Many of the claims rejected by the compensation fund involve GM vehicles involved in other ignition-related crashes. GM recalled more than 11 million additional vehicles last year for other ignition and key issues, but the automaker didn’t approve a compensation fund for any of those recalls.

Fund officials are using a much broader definition to determine whether deaths are related to the defect — including pedestrians who may have been killed as a result of a defective GM car.

GM said the 13 deaths it linked to the defective ignition switch last year, before the compensation fund began its work, “was based on information available to the company at the time, and it was based on a thorough review by engineers of the facts and circumstances of each crash, including any available technical information recorded by the vehicle’s on-board computer.”

The U.S. Attorney’s Office in Manhattan is aided by a federal grand jury, the FBI, 50 state attorneys general, the Securities and Exchange Commission and Transport Canada in an investigation of GM’s delayed recall.