AUTO DEFECTS

GM Ignition Switch Economic Settlement

In 2014, General Motors recalled 30 million cars worldwide that had defective ignition switches. The millions of defective cars proved to be major safety hazards, resulting in 275 injuries and 124 deaths. As a result, victims and their families filed personal injury and wrongful death claims against the carmaker. The entire scandal eventually ended with a GM ignition switch economic settlement. If you or someone you love was injured in a GM car crash because of a defective ignition switch, our Houston personal injury lawyers want to help. Call us today at 713-622-7271.

Did GM Know About the Faulty Ignition Switches?

The defective part was not the only problem for GM, though. The corporation surprisingly knew of the danger for 13 years before instituting the recall. The public became aware of the defective ignition switches following a Georgia law firm’s exposure about how GM secretly redesigned the switch without changing the part number.
 
More people filed civil suits once this came out, this time claiming fraud. The federal government then launched a criminal investigation. This investigation ended in 2015 with the GM ignition switch economic settlement costing $900 million. GM finally settled the investigation with the U.S. Justice Department. Meanwhile, GM also paid $300 million to a New York teachers’ pension fund for lost shareholder equity.

Cause of Ignition Switch Failure

In short, the ignition switch starts the car when someone turns the key because this activates the car’s electrical system. When it came to the ignition switch defect, GM didn’t meet two specific requirements: torque required and vibration environment. The torque is the rotational power that prevents the ignition switch from changing modes. The torque was surprisingly less than 10 Newton centimeters which is so little force that the torque was prone to mode changes. This could potentially shut off the engine.

Vibration Environment

Additionally, the switch must endure a vibration environment without damage or loss of function. Engineers eventually discovered that during extreme vibration, the switch would change modes to Run to Accessory without the driver’s permission. The Run to Accessory mode basically disables the airbags, the power steering, and the anti-lock brake system. Therefore, this is a safety hazard because if a driver crashed, they would likely lose control of the car and the airbags wouldn’t deploy.

Types of GM Ignition Switch Lawsuits

GM has faced (and continues to face) hundreds of lawsuits that pursue damages for ignition switch-related losses, including:
  • Personal injury lawsuits: these lawsuits come from accidents in GM cars that had defective ignition switches.
  • Wrongful death lawsuits: family members of victims who died in GM car crashes filed these lawsuits. Obviously, these cars also had defective ignition switches.
  • Class action lawsuits: these lawsuits seek damages for car devaluation as a response to the ignition switch recall.

GM Ignition Switch Lawsuit Allegations

Car crash victims who filed lawsuits certainly made multiple misconduct claims against the carmaker, including that:
  • GM designed, built, assembled, tested, and sold cars in a defective state
  • GM made unreasonably risky cars available to the public, posing a risk of harm
  • Cars weren’t thoroughly examined and inspected
  • Inadequate quality control measures weren’t implemented
  • GM didn’t issue enough warnings about a flaw it knew about or should have known about
  • GM failed to fulfill its responsibilities to consumers
  • Negligence
  • As a result of these acts and omissions, there were injuries, deaths, and financial losses

GM Ignition Switch Compensation

Depending on the severity of each crash involving a defective GM car, a lawsuit can generally recover damages for losses that include:
  • Past and future medical expenses
  • Lost wages and lost earning capacity
  • Physical and mental pain
  • Disfigurement and disability
  • Loss of consortium
  • Property damage or loss of car value

GM Compensation Fund

GM also paid $625 million as part of a compensation fund in response to 124 deaths and 275 injuries due to defective ignition switches. The main motivation with the compensation fund was to undoubtedly deter victims from filing more lawsuits. Basically, if a victim accepted money from the fund, they aren’t allowed to sue GM.
 
Injury damages through the fund generally ranged from $20,000 to $500,000 depending on how long victims remained in the hospital. All 124 eligible death claimants accepted offers of $1 million or more. Meanwhile, only 221 of the eligible injury claimants accepted compensation from the fund.

What are Punitive Damages?

Basically, punitive damages aren’t meant to compensate a victim for expenses incurred or lost wages. Instead, a victim earns punitive damages when the defendant acts with malice, recklessness, or gross negligence.
 
Presently, states and the federal government handle punitive damages decisions differently. For example, Texas juries must answer two questions unanimously:
  • Did the plaintiff prove by clear and convincing evidence that they deserve punitive damages?
  • How much should the damage award be?
The jury must answer yes to the first question before it can consider the second.

Bankruptcy and Old GM vs. New GM

In 2009, GM filed for Chapter 11 bankruptcy with more than $172 billion in debt. This bankruptcy filing consequently followed the automotive industry crisis of 2008 to 2009, and is completely unrelated to the ignition switch scandal of 2014.

Old GM vs. New GM Liabilities

During bankruptcy, the court’s approach was to split GM into “New GM” and “Old GM,” with the latter taking on the most difficult liabilities. Those liabilities surprisingly didn’t include damages associated with post-sale injuries or fatalities involving Old GM cars. The ignition switch recall involved vehicles from model years 2003 to 2010, but New GM agreed to handle these. The question was whether New GM had also taken on liability for punitive damages, since it was Old GM that failed to disclose the danger.
 
The court ruled that New GM may be liable for punitive damages but “only to the extent…They are based on New GM knowledge or conduct alone.” That could’ve been bad news for plaintiffs. But the court added that plaintiffs could prevail if they proved that New GM had inherited employees who were in-the-know. Plaintiffs could also prevail if they showed documents confirming the company’s knowledge of the defect.

How Do I Know if I’m Eligible for a GM Ignition Switch Lawsuit?

Because legal jargon is often very confusing, some GM car crash victims may not know if they have a case. So how do you know if you’re eligible to file a GM ignition switch lawsuit? You will undoubtedly have a case if you:
  • Sustained serious injury in a crash involving a defective GM ignition switch
  • Lost a family member in an ignition switch crash
  • Own a GM car with a defective ignition switch that lost value due to the recall
  • Didn’t accept payment through the GM compensation fund

GM Ignition Switch Economic Settlement

General Motors eventually agreed to pay a $120 million settlement in response to thousands of lawsuits. However, it’s important to note that this settlement is completely separate from the $625 million compensation fund that paid for the deaths and injuries due to defective ignition switches. Additionally, this settlement isn’t related to a 2015 settlement that paid $575 million for more than 1,380 death and injury claims that weren’t included in the compensation fund. According to GM, this 2015 settlement resolved more than half of the personal injury lawsuits that were pending in a multidistrict litigation in a New York federal court.

Which Vehicles Did GM Recall?

As stated previously, GM recalled 30 million GM cars worldwide during the 2014 faulty ignition switch scandal. But exactly which cars did GM recall in the midst of the legal chaos? Recalled cars range from Chevrolet to Cadillac, including:
  • Chevrolet:
    • Camaro 2010-2014
    • Cobalt 2005-2010
    • HHR 2006-2011
    • Impala 2000-2014
    • Malibu 1997-2005
    • Monte Carlo 2000-2007
  • Pontiac:
    • G5 2007-2010
    • Grand Am 1999-2005
    • Grand Prix 2004-2008
    • Solstice 2006-2010
  • Cadillac:
    • CTS 2003-2014
    • Deville 2000-2005
    • DTS 2006-2011
    • SRX 2004-2006
  • Buick:
    • Enclave 2009-2014
    • Lacrosse 2005-2009
    • Lucerne 2006-2011
  • Oldsmobile:
    • Alero 1999-2004
    • Intrigue 1998-2002
  • Saturn:
    • Ion 2003-2007
    • Sky 2007-2010

Call a Houston Personal Injury Lawyer Today

Since the start of the faulty ignition switch scandal in 2014, General Motors-related lawsuits are ongoing. If you or someone you know has been injured by this scandal and you never received GM ignition switch economic settlement money, attorneys at Reich & Binstock want to help. Skilled and experienced both in and out of court, our attorneys have won several multimillion-dollar verdicts and settlements. Call our Houston office today at 713-622-7271 to schedule a free consultation.
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