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GM Wraps Up Ignition Switch Settlement Fund; 124 Approved Death Claims

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In August 2014, General Motors (GM) set up an independent settlement fund to consider claims filed by individuals who suffered accidents involving a defective ignition switch. GM has recalled millions of vehicles worldwide because of ignition switches that could inadvertently turn to the “off” position, robbing steering, brakes, and air bags of power.

The fund closed on January 31, 2015, at which time it had received over 4,300 claims. According to the Detroit Free Press, the administrator of the fund has announced that all claims have now been reviewed. A total of 124 death and 274 injury claims were approved for payouts.

Though the fund has completed its review of claims, they are still managing the payouts. About one-hundred offers are outstanding.

GM Expects to Pay $625 Million

When GM first started recalling vehicles in February 2014 to repair the ignition switch defect, they acknowledged 13 deaths as being associated with the problem. Just over a year later, the company is offering one million dollars for each of the 124 approved death claims.

They are also offering payments to 17 victims who suffered life-altering injuries because of crashes caused by the defective ignition switch, including permanent brain damage, loss of limbs, and paralysis. The remaining 257 victims suffered what is termed “less serious” injuries, and who were treated in an outpatient setting. The company expects to pay about $625 million in compensation by the time all the cases are closed.

Thousands of claims were not approved for payment, however—about nine out of every ten. Among these were those that lacked sufficient documentation, or lacked evidence supporting the claim that their injuries were caused by the ignition switch malfunctioning.

GM Not Through Defending Itself Yet

Even with the settlement winding down, however, GM isn’t done dealing with this issue. The company is still being investigated by the U.S. Attorney for the Southern District of New York for possible criminal wrongdoing. They could end up facing another large fine depending on the findings.

GM also faces several more individual ignition switch lawsuits that have been filed by individuals who chose not to seek settlements through the company’s fund. Many of these involve claims of injuries and/or deaths linked to ignition-switch-caused accidents, and many more claim that GM should be held liable for the way the ignition switch defect affected car values.

In June 2014, the U.S. Judicial Panel on Multidistrict Litigation (JPML) consolidated all federal GM cases into the Southern District of New York. The first sample case is expected to go to trial in January 2016.

NHTSA Shares in the Blame for Lack of Safety Oversight

GM isn’t the only one under fire for how they handled the ignition switch defect. The National Highway Traffic Safety Administration (NHTSA) recently received a scathing report for their inability to identify the link between accidents involving air bags that didn’t deploy in GM vehicles and the ignition switch problem. In 2007, the group recommended an investigation into crashes involving Saturn Ions and Chevrolet Cobalts, but later determined that there was no link between the air bags and the crashes, so nothing happened.

The recommended a second investigation in 2010, but again, no action was taken. The NHTSA has made promises to improve employee training and internal processes to better catch safety problems in the future.