General Motors has offered at least US$1m to families of those who died as a result of defective ignition switches in its cars.
The automaker will give another $300,000 for each surviving spouse and dependent, in addition to a sum of money that will be determined by the victims’ earning potential, CNN reported.
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The automaker also said it would not cap the total amount of money it will pay to the compensation fund.
At least 13 people died, and many more were injured as result of a faulty ignition switch installed in 2.6m, now recalled, GM cars.
The automaker is also offering money to those injured in crashes that were caused by the defect in the cars.
Lawyer Kenneth Feinberg, a specialist who, CNN noted, devised compensation plans for victims after 9/11 and the BP oil spill, issued the details at a press conference on Monday (30 June), about four months after GM recalled the affected vehicles. He was hired as a consultant by GM last April.
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By GlobalDataThe 13 people that GM said were killed as a result of the ignition switch flaw died when the front airbags failed to deploy.
But Feinberg said – for the first time – today that any passengers killed or hurt are also eligible for compensation.
Additionally, the passengers and drivers in any other cars involved in a crash are all eligible, as are any pedestrians involved.
Victims may file a claim even if their own negligence, such as speeding or driving drunk, contributed to the crash, CNN noted.
Payouts to those who suffered serious, life-altering injuries will be determined on a case-by-case basis. Those with less serious injuries will be paid depending on the number of nights they spent in hospital.
For example, CNN reported, someone who spent one night would receive $20,000, while someone hospitalised 32 nights or more would be paid $500,000.
Terms and conditions do apply, though. Any victim who accepts the money waives their right to sue GM. The programme is voluntary and victims can bypass the whole programme and take GM straight to court instead.
CNN noted that taking the automaker to court could be an uphill battle since a bankruptcy court gave the company a liability shield for incidents that happened prior to its filing in 2009.
Anyone who lost a loved one or was seriously injured in a crash related to the recall can file a claim with GM between 1 August and 31 December, 2014.
Feinberg also said he would hold a private meeting with any claimant that wishes to do so, CNN reported.
In a statement, GM CEO Mary Barra said: “We are pleased that Mr Feinberg has completed the next step with our ignition switch compensation programme to help victims and their families.
“We are taking responsibility for what has happened by treating them with compassion, decency and fairness. To that end, we are looking forward to Mr Feinberg handling claims in a fair and expeditious manner.”
Karl Brauer, senior analyst for KBB.com, said: “GM’s compensation plan for victims of the ignition switch recall appears aggressive and comprehensive. The dollar figures appear in line with similar payouts for other victim funds, and the plan’s speed and flexibility in making the payouts suggests GM’s desire to quickly compensate victims. Any dollar figure, ultimately, is a poor substitute for lives lost, but at this point, it’s the only recourse available to both GM and these victims.”
