General Motors protected from faulty ignition-switch lawsuits, judge rules

General Motors HQ Detroit

General Motors will not have to face dozens of lawsuits accusing it of concealing an ignition-switch defect that has been blamed for more than 200 deaths and serious injuries, a US bankruptcy judge ruled on Wednesday.

GM had argued it was protected from claims on vehicles pre-dating its 2009 exit from Chapter 11 bankruptcy. Plaintiffs in the lawsuits said the company had mislead the bankruptcy court by not disclosing the faulty ignition-switch issue, which it knew about in 2005. The ignition switch issue has now been linked to 84 deaths and 157 serious injuries.

According to its own investigations, GM had been aware of issues with ignition switches on Chevrolet Cobalts and other small cars for more than a decade before they started issuing recalls. In an internal report last year, GM chief executive Mary Barra said a “pattern of incompetence” had caused the fatal delay.

The decision by US bankruptcy judge Robert Gerber means GM may avoid potentially billions of dollars in liability, as well as the cost of defending those lawsuits, although claims arising after its bankruptcy will not be affected. The plaintiffs will have to file their claims instead against the financially limited “Old GM”, the shell company comprised of bad assets GM shed in bankruptcy.

The claims center on a faulty ignition switch in some older vehicle models that could slip out of position, cutting power to brakes, steering and airbags. Last year, GM recalled 2.6m vehicles with the switch, and later issued a series of additional recalls for other safety issues. The defect was linked to nearly 160 injuries and 84 deaths.

The claims mostly allege loss in vehicle value, as GM has already agreed to compensate most injury and death claimants through a separate fund. However, some personal injury and death claimants who were not compensated through the fund are among those now suing the company.

“This ruling padlocks the courthouse doors,” Texas attorney Bob Hilliard, one of the lawyers representing the plaintiffs, told the Wall Street Journal. “Hundreds of victims and their families will go to bed tonight forever deprived of justice. GM, bathing in billions, may now turn its back on the dead and injured, worry-free.”

Last year, family members of victims of the ignition switch failures attended heated congressional hearings about the company’s failure to recall cars earlier. “Repeatedly, individuals failed to disclose critical pieces of information that could have fundamentally changed the lives of those impacted by a faulty ignition switch. If this information had been disclosed, I believe in my heart the company would have dealt with this matter appropriately,” Barra told Congress.

Powered by Guardian.co.ukThis article was written by Dominic Rushe and wires, for theguardian.com on Wednesday 15th April 2015 23.36 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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