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"New GM" Escapes Liability on Pre-2009 Defective Ignition Switch Lawsuits

A recent ruling by Bankruptcy Judge Robert Gerber has shielded General Motors from liability for its actions regarding its cover up of ignition switch defects from before it's emergence from the company's 2009 bankruptcy. As a result, a person involved in an accident as a result of the ignition switch defect can only sue if the accident happened after GM's exit from bankruptcy. 

By way of background, on February 7, 2014, GM issued a recall as a result of faulty ignition switches that, to date, has included millions of its vehicles. The specific issue was that the engine of a car with a faulty ignition switch would randomly shut off and, as a result, prevent the air bags from deploying in the event of an accident. Incredibly, the problem was allegedly discovered by GM as early as 2005, and was not made public until a lawsuit was brought by a Georgia attorney in June of 2011.

According to GM, the issues with ignition switch have been responsible for 87 deaths, and 11 "Category 1″ claims, which include quadriplegia, paraplegia, double amputation, permanent brain damage, or pervasive burns.

GM has agreed to set aside $400 million, the equivalent of 17 days of profit for GM, for victims of accidents caused by this issue no matter when the accident occurred. However, there is no guarantee that this number will be sufficient to cover all of the victims of the ignition switch issue. Indeed, there were over 4,000 claims submitted to GM regarding this issue, with 475 of those being wrongful death claims.

GM has already rejected a significant number of these claims, but it is likely that many of the rejected claims will result in civil lawsuits. For victims of accidents that resulted from this issue, but occurred before the date of the exit from bankruptcy, this recent ruling will likely mean that they will have no legal right to any compensation, regardless of any negligence on the part of GM.

The attorney handling the case said he would appeal the ruling that has allowed GM to escape liability on any of its pre-bankruptcy actions.

Click here to a list of GM vehicles included in the recall.

If you or someone you know has been in an accident while in a GM vehicle where the ignition switch failed, contact the Law Offices of Louis Grandelli for a free consultation.

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