Plaintiffs Give Up on GM Faulty Ignition Switch Fund, Look to Courts Instead

New York, NYA division has formed between plaintiffs trying or having tried to access a compensation fund established by General Motors for victims of faulty GM ignition switches, and those plaintiffs who have either given up on the fund, don’t qualify, or at the end of the day feel they would fare better with the courts. The dividing of the camps adds to the drama over the faulty ignition switches that plaintiffs allege GM knew about and tried to hide. In the end, many plaintiffs are bailing on the GM Faulty Ignition Switch Fund, opting to face the courts on their own.

More than 200 people have either died or been injured as the result of accidents that occurred when the allegedly defective switches slipped into the “accessory” mode while the vehicle was actively engaged, cutting power to powered systems and disabling airbags crucial to the safety of occupants in a pending collision. Some 2.6 million vehicles were recalled by GM last year when the defect came to light.

The multimillion-dollar fund set up last year by GM to compensate victims closed for submissions at the end of January of this year. And there were restrictions: the fund only covered victims who were injured, or the estates of those who died in vehicles specifically recalled for the ignition switch defect. There is no provision for victims who may have suffered from related defects associated with some 30 million vehicles recalled in 2014 for other deficiencies. The GM compensation fund was not designed, according to various attorneys conversant with the situation, for victims hospitalized for a relatively short period of time but remain with severe disability.

There are also eligibility requirements that so far appear to favor a minority of claimants. According to various reports, close to 1,700 claims to the fund for death or injury remained under review as of April 10. That figure represents about 40 percent of all claims filed with the GM compensation fund. While 241 claims were deemed eligible for compensation, about five times as many - 1,318 - were ineligible.

Some feel the payouts are deficient, with reports of many claimants to the fund with head and neck injuries offered amounts of less than $10,000. Added to that, is the need for a waiver that removes a claimant’s right to sue once having accepted a payment from the GM Faulty Ignition Switch Fund.

There are also reports of delays. One claimant, who has since gone on to file her own lawsuit against GM, is Melissa Adams. The victim of an accident that occurred in 2012 in Tennessee had submitted a claim by the deadline, as well as additional documentation after the fact - but has apparently heard nothing back since February 15. Adams’ attorney is concerned about her one-year statute of limitation running out while waiting for a response from the fund.

They’re not waiting. Their lawsuit against GM was filed in March.

About a week or so ago GM won a bankruptcy ruling, on April 15, that will serve to bar many of the claims related to accidents occurring prior to 2009. However, most of the more recent lawsuits are not subject to that decision, so it’s all systems go as plaintiffs hold that GM knew about the defects, and did little in response, putting innocent drivers, passengers and others on the road in jeopardy.

Thus they are heading to court. US District Judge Jesse Furman of the US District Court, Southern District of New York is planning for the first GM Ignition Switch trials tentatively scheduled for January 11 of next year.