GM in settlement talks over recalled cars

05/02/2014 5:51 PM

05/02/2014 5:52 PM

General Motors has begun preliminary talks to settle more than 300 claims involving wrongful death or personal injury from accidents tied to the defective ignition switch that has led the company to recall more than 2.6 million small cars, a lawyer for the plaintiffs and a company spokesman confirmed Friday.

The claims were brought by one lawyer, Robert C. Hilliard of Corpus Christi, Texas, and their number suggests a potential universe of victims far greater than the 13 deaths and 32 accidents that GM has linked to the defect. Hilliard’s clients alone account for 53 claims of wrongful death and 273 personal injury claims involving the recalled vehicles, he said.

Hilliard met Friday morning in Washington for nearly four hours with Kenneth R. Feinberg, the lawyer GM hired last month to explore a compensation fund for victims of accidents tied to the faulty switch, which can shut off power while cars are in motion, disabling air bags and impeding steering and brake systems. Feinberg has overseen similar funds in numerous catastrophes, including the attacks of Sept. 11, 2001, the Boston Marathon bombings, and the BP oil spill in the Gulf of Mexico.

Neither side would discuss the terms being discussed.

The session was the clearest indication yet that GM plans to compensate accident victims and their families, even though it is moving aggressively to dismiss other types of lawsuits, including dozens of class-action cases seeking compensation for diminished value of the recalled vehicles.

“We’ve taken responsibility for our actions, and we will continue to do so,” said Greg Martin, a company spokesman. “We’ve acknowledged that we have civic and legal obligations as they relate to injuries in accidents involving the recalled cars.”

GM’s July 10, 2009, bankruptcy reorganization insulated the company from legal claims stemming from accidents that occurred before that date, but Martin confirmed that the company would not make that distinction with the personal injury and death claims that Feinberg reviews.

Part of Feinberg’s review will include the plaintiffs represented by Hilliard, and whether they will be eligible for compensation.

The meeting came as another team of GM lawyers was in bankruptcy court in New York seeking to use that protection to dismiss the class-action lawsuits brought against the company seeking compensation for economic losses. The judge, Robert E. Gerber, did not rule on the company’s motion to enforce that provision of the bankruptcy agreement and said he would not interfere with plans for a May 29 hearing before a panel of federal judges to consolidate the pretrial phase of dozens of class-action cases.

GM is the subject of multiple investigations – by the Justice Department, Congress, federal highway safety regulators and the Securities and Exchange Commission – over its handling of the defective switch, a problem that the company acknowledges it knew about more than a decade before the recall.

Hilliard said he and Feinberg had known each other for years and worked with each other on BP claims. He said that the two men had been in preliminary email and phone discussions since Feinberg was retained by GM but that Friday’s session was their first face-to-face meeting on the issue.

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