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GM Compensates Some Pre-Bankruptcy Claimants

General Motors has received some negative press as of late; not only has it recalled millions of vehicles for defective ignition switches, but it has also been implicated in the deaths and injuries of hundreds of individuals across the United States as a direct result of accidents caused by the company’s defective vehicles.

Despite the high number of injuries and deaths associated with the faulty cars, a federal judge blocked the majority of lawsuits against the company in April of 2015. The April ruling was based on a decision by Judge Robert E. Gerber, who determined that the liability shield that was included in the 2009 agreement that pulled GM from bankruptcy should be upheld. The ruling that shielded GM from defective ignition-related suits can be read about in more detail in The New York Times.

However, despite the liability shield, GM nonetheless chose—on its own terms—to compensation some victims of pre-bankruptcy crashes.

Compensation Fund Established

GM has set up its own compensation fund for victims, run by the company’s lawyer, Kenneth R. Feinberg. Of the 4,343 claims filed against the company, Feinberg found 399 claims to be eligible for compensation. One hundred and twenty-eight of the approved claims (32 percent of the total) were for accidents that occurred before GM filed for bankruptcy. Of the 399 claims found to be eligible for compensation, 124 of those of those claims were for deaths, 18 for catastrophic injuries, and 257 for other injury types.

GM Ignores Contributory Negligence When Paying Victims’ Claims

Not only has GM decided to pay claims that the company has liability protection for, but it has also decided to pay those claims despite instances of contributory negligence. In fact, in 61 percent of the eligible claims, acts of contributory negligence were found. These acts include speeding, driving without a seatbelt, and drug and alcohol use. James Cain, a spokesman for the company, told reporters at The New York Times that the company decided not to challenge drivers’ errors, and instead took a nonadversarial approach to settling claims. A total of $595 million has been authorized for the 399 claimants.

As a note, GM has also agreed to pay $575 million to 1,380 victims of ignition switch-related accidents. However, that settlement excluded 180 pre-bankruptcy suits. If the April 2015 ruling, cited above, is overturned, those 180 pre-bankruptcy victims will have their chance in court, too; otherwise, these victims will not receive any settlement amount.

What an Attorney Can Do For You

Being harmed in an accident that is caused because an automaker manufactured or designed a vehicle with a defect is a horrific experience. What is even worse is when these victims are barred from recovering compensation because the negligent company is protected from liability. If you have been in an accident that you believe would not have occurred but for a defective vehicle or vehicle part, consult a product liability attorney to learn more about your rights to compensation. The experienced New Jersey and Pennsylvania product liability attorneys at Cohen, Placitella & Roth, P.C. are ready to discuss your claim with you in person today. Call now at (215) 567-3500.

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