General Motors continues to say it knows of 13 deaths connected to the faulty ignition switches it used in a wide range of vehicles recalled earlier this year, but the special victims’ compensation fund it has set up has already received claims linked to the death of at least 100 people.
While it remains to be seen if the fund will approve payment to all those who’ve filed, it is also expected the number will continue to increase in the weeks and months ahead.
GM has said it anticipates paying out from $400 million to $600 million in connection with the fund, which was set up under intense pressure from safety regulators, federal lawmakers and consumer groups after the maker acknowledged it knew about the ignition switch problem for as much as a decade before ordering the February recall of 2.6 million vehicles.
But the administrator, Ken Feinberg, who has also handled victims’ funds linked to the 9/11 terror attacks, the BP Gulf oil spill and the Boston Marathon bombing, has stressed that he has an open checkbook and is encouraging anyone with a possible claim to file as soon as possible. Feinberg last month said he would even assist potential claimants gather the evidence necessary to receive compensation.
(100s, perhaps 1,000s could be eligible for GM fund. Click Here to learn more about the plan.)
Along with the 100 death claims the fund has now received from families and estates, it has also received claims for 184 injuries. Feinberg and his staff have created a complex formula to determine what any victim would qualify for, and under certain circumstances the payments could climb into the millions of dollars.
Earlier this month, a federal judge overseeing court cases filed against GM over the ignition switch problem encouraged victims and their lawyers to consider turning to the compensation fund rather than battling their cases out in court.
(Why does a federal judge want lawyers to turn to compensation fund? Click Hereto find out.)
GM has so far publicly acknowledged 13 deaths linked to the defective switches, though officials have also admitted the number could reach higher. The company’s total does not include passengers, but only drivers, for example, nor does it list those in other vehicles killed in a multi-car collision.
The problem centers around a faulty switch that could inadvertently turn from the On position to Off or Accessory when the vehicle is jostled. In such an instance, the car would stall and its power steering and brakes, as well as its airbag system, would deactivate.
The first sign of a potential problem was observed more than a decade ago, but GM waited until February to order a recall. The backlash has led the maker to order a number of changes, including the appointment of a corporate safety czar. In turn, it has now ordered more than 60 additional safety-related recalls this year, impacting over 30 million vehicles.
(G Q2 earnings crushed by recall costs. Click Here for the story.)
The maker has already paid the largest fine in U.S. history, ordered by the National Highway Traffic Safety Administration for delaying the ignition switch recall. Meanwhile, it is facing a series of investigations, including one by the U.S. Justice Department that could eventually lead to criminal charges.
Administrator Feinberg is hoping to have all potential victims’ claims in hand by the end of this year, and intends to issue payments to those who qualify by early in 2015. It remains to be seen how many of those who have so far filed actually will fall under the fund’s guidelines.