Facing possibly hundreds of death and injury claims for a problem the company covered up for more than a decade, GM set no total cap on payouts and made clear it would accept claims from the broadest possible victim population, including people who have already settled previous claims for the same problem.
Kenneth Feinberg, the compensation expert GM hired to organise payouts to victims, made clear that the $1 million payout to families of at least 13 people killed would cover suffering and be just a starting point for claims for economic losses and hardship.
“There is no ceiling on the aggregate dollars,” Feinberg announced.
Victims will be able to file for lost earnings and benefits over a prospective lifetime, and costs of special care needed by injured victims over a lifetime. Those could come to many millions of dollars apiece, he said, giving several examples.
He also said that GM would not hide behind its 2009 bankruptcy, which appeared to have protected the company from pre-2009 liabilities. And he said even people who may have been texting or drunk in an accident that can be tied to the faulty ignition switch would be eligible.
Any contributory negligence would be “irrelevant” under the program. “This program is aimed at compensation for defective switches.”
Feinberg also made clear that no victim is compelled to join the program and those who do will still be able to sue the company separately for damages. Only once they accept a payout under the program would they give up the right to file further claims.
The breadth of the victim base, and so the total costs the automaker is facing, were still unclear from the announcement made by Feinberg, who in the past has been involved in setting compensation for damages from the BP oil spill and the Boston marathon bombing.
He will have full authority to decide GM’s payouts for death and injuries, he said.
GM has so far publicly acknowledged 13 deaths in 54 accidents linked to the ignition switch defect, but federal safety officials suggest the toll could be higher.
And the independent Center for Auto Safety says it has counted more than 300 deaths linked to air bag non-deployment in the GM cars covered by the ignition recall, though it has not tied those to ignition shutdowns.