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Chrysler Walks Away From Lawsuit Liability

GM may also emerge immune to past liability claims.

by on Jun.24, 2009

Chrysler and GM together face nearly 3,500 lawsuits a year for death and injuries allegedly resulting from product defects. Post-bankruptcy, they'll be able to walk away from those claims previously filed.

Chrysler and GM together face nearly 3,500 lawsuits a year for death and injuries allegedly resulting from product defects. Post-bankruptcy, they'll be able to walk away from those claims previously filed.

Just mention the term, “plaintiff attorneys” in automotive circles and watch how everyone flinches.  Big Three executives have, over the years, often claimed that liability and other lawsuits can add hundreds, even thousands, of dollars to the cost of a new vehicle.  While hard data aren’t easy to come by, there’s no question that the industry is often hit by multi-million dollar verdicts when juries find fault with vehicle designs or manufacturing defects alleged to have caused injuries or death to motorists and passengers.

While the auto industry has been less successful than the medical professions in getting liability limits enacted into law, the newly-reformed Chrysler appears to have found an alternative, if temporary reprieve likely to save it many millions of dollars.

When the automaker recently emerged from bankruptcy protection, and its remaining assets were put under the control of Italy’s Fiat, this new Chrysler was exempted from liability not only to existing lawsuits but to legal action that might arise in the future involving vehicles built before June 10th, the day of the sale.

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