GM's $594.5M payout averages $1.5M per ignition switch injury

The General Motors Ignition Compensation Claims Resolution Facility announced the final tally for its grisly duty of providing money to those killed or injured by the automaker's faulty ignition switches. In the end, the group offered over $594.5 million to the 399 cases that were eligible for compensation, including 124 deaths. That's an average of about $1.5 million per claim, but the actual payments varied between fatalities and the severity of a person's harm, so claimants could have received more or less than that.

When the lawyers at the compensation facility presented settlements to people, 90.5 percent of them accepted the money, including all of the death claims. In total, the group received 4,343 reports of injuries or fatalities, which means just 9.2 percent of applicants got a monetary offer. Accepting the payment also waived a person's right to sue GM later for its faulty components.

In the announcement, the group portrays its work as a success. To get the word out about the program, the facility sent out over five million notices to current and former owners of GM's affected vehicles. The lawyers also tried to make the process as quick as possible and didn't do technical evaluations or consider the possible contributory negligence of drivers. In fact, there was potentially another factor involved in 61 percent of the eligible claims like not wearing a seatbelt or driving under the influence.

GM initially believed there were 13 deaths and 54 crashes from the faulty switches, and it put lawyer Kenneth Feinberg in charge of the claims process to receive reports of more. He had full responsibility to administer the program, and there was no cap on the maximum amount for compensation. He even extended the original deadline by an extra month late last year. According to Reuters, GM has now spent over $2 billion on the ignition switch fiasco.
Show full PR text

DECEMBER 10, 2015

The GM Compensation Claims Resolution Facility is nearing completion of its work. The Program was designed to provide swift compensation to eligible individual claimants who submitted claims to the Facility. During the past sixteen months, the Facility has worked closely with individual claimants (and their lawyers if applicable) to determine eligibility and compensation. The Facility has reviewed, evaluated, and resolved 4,343 claims and determined that 399 claims were eligible for compensation from the Program. These 399 eligible claims were finalized and payment has been made, or is in process, to all claimants who have accepted the Facility's Final Determination Offer. The total aggregate amount of compensation offered was $594,535,752. The Facility is pleased to report that over 90 percent of the offers extended to eligible claimants were accepted. We attribute the success of the Program to a number of important factors, including the following:

First, to achieve the goal of notifying as many potentially eligible individuals about the existence of the Program, over 5 million notices were sent out by GM to current and former owners of eligible vehicles announcing the establishment of the Program.

Second, in developing the Protocol, the Program Administrator solicited input from divergent interests, including claimants' attorneys, GM, and other groups. While the Administrator gave due consideration to all submitted views and opinions, the Facility retained complete and sole discretion over all eligibility decisions and compensation awards to eligible claimants. GM placed no cap on the aggregate amount, had no say in final eligibility determinations and agreed to pay whatever the Facility deemed appropriate in each and every case.

Third, the Facility's goal was to create a compensation program that was efficient, speedy, cost effective, and consistent in resolving the claims of individuals who applied for compensation. For this reason, the Facility did not conduct rigorous scientific or technical determinations or engineering analyses as to whether an ignition-switch defect manifested itself in a particular accident or whether a particular death or injury was "caused" by an ignition-switch defect. The Facility also did not consider legal defenses that might otherwise be available to GM in litigation, such as contributory negligence, statutes of limitations, or the bankruptcy shield.

Final Program Statistics
Table No. 1: Claims Filed
Death: 473
Category One: 280
Category Two: 3,590
Total Individual Eligible Claims: 4,343
Table No. 2: Final Eligibility Determinations
Death: 124 349
Category One: 18 262
Category Two: 257 3,333
Total Individual Eligible Claims: 399 3,944
% of Eligible Claims: 9.2% 90.8%
Table No. 3: Final Offers Accepted/Rejected
Death: 124 0 0
Category One: 16 1 1
Category Two: 221 36 0
Total Individual Eligible Claims: 361 37 1*
% of Eligible Claims: 90.5% 9.3% .2%
*Outstanding Offer Expires 1/6/16
Table No. 4: Date of Accident
Number of Accidents Occurring Pre and
Post GM Bankruptcy Filing Date
Accident Occurred prior to July 10, 2009
Eligible Claims: 128
All Submitted Claims: 856
Accident Occurred on or after July 10, 2009
Eligible Claims: 271
All Submitted Claims: 3,105
No Data: 382
Table No. 5: Contributory Negligence (244 individual eligible claims had one
or more of the following factors associated with their respective accidents)*
Number of Contributory Negligence Factors Associated with Eligible Claims
Death Claims
Category One Claims
Category Two Claims
No Seat Belt: 55 5 64 124
Excessive Speed: 57 6 88 151
Driving Under the Influence (Alcohol or Drugs): 32 4 32 68
Fell Asleep: 4 0 13 17
Reckless Driving: 3 0 4 7
Total Contributory Negligence Factors: 151 15 201 367
Total Individual Eligible Claims: 92 8 144 244
% of Eligible Claims: 74% 44% 56% 61%

*It is important to emphasize that the Protocol expressly ignored any evidence of contributory negligence on the part of the driver; accordingly, the Program did not consider any such evidence in making its individual determinations. Yet, contributory negligence loomed large as a contributing cause of many of the automobile accidents resulting in death and physical injury.

Of the 399 claims deemed eligible for compensation by the Program, 244 claims (61%) involved accidents in which the claim file documentation contained clear evidence of one or more of the following examples of contributory negligence: no seat belt, excessive speed, driving under the influence of alcohol or drugs, fell asleep, reckless driving. (Several claimants were associated with multiple factors of contributory negligence.) In such cases, claimants would confront serious legal challenges if litigating in the courtroom. By ignoring any evidence of such contributory negligence, the Program proved to be a preferred avenue for individuals seeking compensation.

Share This Photo X