General Motors Co. has hired Kenneth Feinberg, a top compensation expert, to pay people harmed in crashes caused by faulty ignition switches in older-model small cars. GM says it’s trying to do the right thing by making the payments. The company says at least 54 crashes and 13 deaths were caused by the problem, but lawyers and lawmakers say there will be hundreds of claims.
Here are details of the compensation plan announced Monday:
WHO’S ELIGIBLE: Drivers, passengers, pedestrians, and people in other cars involved in crashes with the GM vehicles who suffered physical injuries or relatives of people killed in crashes. Property damage claims and claims of psychological injury won’t be included.
DEADLINE: People can begin applying for compensation Aug. 1. The deadline for filing a claim is Dec. 31. Feinberg expects most claims to be processed in 90 to 180 days.
COMPENSATION LIMITS: None for deaths or extreme injuries such as permanent brain damage, loss of limbs, paralysis and serious burns. Less serious injuries are limited by formulas similar to what Feinberg used to compensate those injured in the Boston Marathon bombings. People can get quick settlements based on formulas for death and extreme injuries, or they can try to prove to Feinberg that they should get more money by proving extraordinary circumstances. Feinberg says GM has placed no limit on the total he can spend. Lawyers say it will be in the billions.
BURDEN OF PROOF: Claims must show that the crashes were caused by faulty GM small-car ignition switches. The switches can unexpectedly slip from “run” to “accessory,” shutting off the engines and causing loss of power steering and brakes. The air bags also are disabled. Crashes in which the air bags deployed likely won’t be eligible, because of the air bags worked, the switch was working too. Feinberg said people with extenuating circumstances – i.e. drivers who were drunk or speeding – can still apply for compensation.
RIGHT TO SUE: Those who settle with Feinberg give up their right to sue.
AFFECTED MODELS: About 2.6 million small cars worldwide, including the 2005-2007 Chevrolet Cobalt and Pontiac G5; 2003-2007 Saturn Ion; 2006-2007 Chevrolet HHR, Pontiac Solstice and Saturn Sky; 2005-2007 Pontiac Pursuit; 2007 Opel/Vauxhall GT and 2007 Daewoo G2X. New models (2008-2011) of the same cars that got the switches as replacement parts are also included.