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5 People Reject Payments from GM’s Ignition Switch Settlement Fund

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At last count, General Motors (GM) had found 172 claims eligible for compensation through their independent settlement fund. Created in August 2014, the fund received over 4,300 claims by the deadline of January 31, 2015.

Those who accepted compensation from GM had to agree not to file any additional lawsuits. Most have done that, but according to reports at Dow Jones Business News and CNBC, five plaintiffs have rejected the settlement offers, which means they may go on to file individual lawsuits against the company.

Plaintiffs Injured in Accidents Related to the Ignition Switch Defect

Plaintiffs filed claims to the GM settlement fund because they had been allegedly injured or their family members killed in car accidents that involved an ignition switch problem.

GM recalled millions of vehicles worldwide because of a faulty ignition switch that could inadvertently turn to the “off” position, robbing the engine, steering, and air bags of power. When this occurred during an accident, occupants were left unprotected by air bags, and sometimes suffered serious injuries and death as a result.

GM started recalling vehicles in February 2014, and continued to add to the recalls all year long. The settlement fund included only some of those vehicles recalled—mostly those made between 2005 and 2007.

GM Death Toll Rises to 64

Compensation experts running the GM fund expressed surprise at the five rejections, particularly as they were so-called “category 2” claims—severe injuries, but not deaths. Payouts for injuries in this category typically range between $20,000 and $500,000 and depend on the number of days the victim spent in the hospital, the victim’s age, and how their potential future earnings were impacted by their injuries. Payouts for death claims start at $1 million.

GM had set aside $400 to $600 million to cover all the payments, and by the January 31 deadline, still held to that figure as being adequate. Those who accept the payments give up their rights to any future lawsuits against GM. The five who rejected the payments, however, are eligible to go on and file a lawsuit against the automaker if they so choose.

Though settlement administrators are still going through claims—over 1,500 are still under review—as of March 9, 2015, the fund had approved 64 death claims and 108 injury claims. Estimates are that it will take about another six months to completely wrap up the review.

When the company started the ignition switch recalls in February 2014, they acknowledged only about 13 deaths related to the problem.

GM Ignition Switch MDL Underway in New York

On June 9, 2014, the U.S. Judicial Panel on Multidistrict Litigation (JPML) consolidated all federal GM ignition switch lawsuits in the Southern District of New York. The MDL includes cases filed because of ignition-switch related injuries, as well as so-called “economic lawsuits” filed by plaintiffs who say GM’s mishandling of the issue resulted in a drop in value for their vehicles.