Victim-compensation expert Ken Feinberg will disclose Monday details of a program to compensate people victims of crashes involving GM vehicles with faulty ignition switches. The announcement will be made at 10 a.m. at the National Press Club in Washington, Feinberg wrote in an e-mail to Automotive News.
GM tapped Feinberg to determine which of the thousands of crashes occurring every involving Chevrolet Cobalts, Saturn Ions and other cars covered by the ignition-switch recall were actually tied to the defect.
He was also tasked to determine the amount of compensation to be paid to the victims. While he is not expected to place a dollar amount to the program, it would be beneficial to determining the carmaker’s ultimate financial exposure from its handling of the faulty ignition switch recall.
GM already has taken a $700-million charge to cover the cost of calling back 2.6 million cars. GM has allocated a total $2 billion for this year to cover the costs of 44 recalls that now cover 20 million vehicles around the world.
GM was also fined $35 million by the federal authorities over its slow response on the switch recall. Terms of the Feinberg plan are expected to influence whether victims choose file individual lawsuits against the carmaker.
According to terms of its restructuring, GM cannot be sued for liability for accidents that occurred before it emerged from bankruptcy, which was July 10, 2009. GM executives have remarked that GM has given Feinberg a free rein to set the criteria for determining which car crashes should qualify for the program.
GM chief executive Mary Barra remarked that they have instructed Feiberg that the carmaker wants to make sure anybody who suffered harm be part of the compensation.
GM has tied the defective ignition switch to 13 deaths on 54 accidents – all of which are frontal-impact crashes wherein airbags failed to deploy since the ignition switch shifted out of the "run" position.
Trial lawyers and safety advocates have argued that the pool of victims should be expanded to include any accident wherein the ignition switch shifted out of run since the loss of power steering and brakes could also make the driver to lose control.