In quick succession, General Motors has avoided major damage in four of six injury lawsuits that were expected to dominate the calendar in 2016.
GM confirmed that plaintiffs’ lawyers suing over a faulty ignition switch design linked to nearly 400 injuries and deaths dismissed what was scheduled to be the fourth in a series of six test trials over the defect, according to Reuters.
The dismissal followed a settlement in what was to be the third lawsuit to go to trial and followed a win for the automaker a week ago in the first of the so-called bellwether trials to reach a verdict. Terms of the settlement in what was to be the third bellwether case were not disclosed.
The bellwether trials were scheduled to help GM and the plaintiffs define settlement options in 234 injury and death lawsuits consolidated in Manhattan federal court. The dismissal represents a serious setback for remaining plaintiffs in the multidistrict litigation now pending in U.S. District Court in the Southern District of Manhattan.
(GM makes a deal on third bellwether case. For more, Click Here.)
The settlement in a case involving fatal accident in which the father of five children died came after GM had emerged victorious in two other cases connected to the multidistrict litigation.
The first case was thrown out of court after it was disclosed the plaintiff was guilty of misconduct during the preparation for trial and in the second case, GM was cleared by jury, which found the injuries sustained in the accident were not serious enough to support any kind of claim of damages.
Nevertheless, the automaker has spent more than $2 billion, according to various filings with the Securities Exchange Commission, to pay government imposed fines, lawyer fees and individual settlements since the scandal broke into public view more than two years ago and earned the company sharp rebukes from the U.S. Department of Transportation and Congressional committees.
The switch can slip out of place, causing the engine to stall and cutting power to the brakes, steering and airbags.
(GM positioned to stay profitable in even a bad downturn. Click Here for the story.)
The ignition-switch defect has been linked to at least 124 deaths and GM Chief Executive Officer Mary Barra has described the ignition-switch as a serious blow to the company’s reputation.
As part of the resolution of the ignition-switch defect scandal, GM set up a settlement process that allowed hundreds of claimants to resolve their claims out of court. GM hired Kenneth Feinberg to administer the claims process.
Barra also used the scandal, which led to the dismissal of 14 GM employees, to push through a re-organization of GM’s engineering organization and a wholesale changes in the company’s protocols for handling recall and safety-related issues.
In addition, 14 GM employees were dismissed after an independent investigation indicated the problem had been ignored and then covered up by GM personnel.
(GM’s Renaissance design chief Ed Welburn retiring. For more, Click Here.)
The ignition-switch scandal, while it put enormous pressure on GM and has been enormously expensive, has been eclipsed in recent months by the scandal surrounding Takata air bags, which has involved virtually every automaker in world outside China and India and the Volkswagen emission-cheating scandal, which could ultimately cost far more for the VW to resolve.