General Motors Settlement Highlights Fraud and Deadly Auto Accidents

General-Motors-LogoRecently, it was announced that General Motors agreed to a $900 million settlement as a result of the Justice Department’s investigation into its failure to fix a (known) deadly ignition-switch defect that was responsible for approximately 120 or more deaths (and an additional 275 injuries) in auto accidents over the course of a decade. The problem was faulty ignition switches, carrying the potential to cut off power to air bags, thus seriously endangering passengers during an auto accident. Engine power to the cars was also suddenly cut off in these incidents, affecting power steering and brakes as well.

National Highway Traffic Safety Administration Investigation

The investigation was linked to one conducted by the National Highway Traffic Safety Administration and several congressional committees conducted in 2014. General Motors initially concealed the defection from the Administration, trying to buy time to manage the issue instead of immediately reporting it, as required by federal law.

The incident initially triggered the recall of certain cars, such as the Chevrolet Cobalt and Saturn Ion, from 2003 – 2007. Other models reported include the Chevy HHR, Pontiac Solstice, Pontiac G5, and Saturn Sky from 2003 to 2011. According to news reports, the defect was first noted by the company as early as 2001.

Defrauding 1,400 Victims

The department found that General Motors engaged in a scheme to conceal the safety defect from regulators, and is still looking into which individual employees, specifically, knew of what was happening. The company admitted to having defrauded customers by marking their vehicles as safe as part of the settlement negotiations, and extended the settlement offer to close to 1,400 victims, while also settling a shareholder lawsuit that carried a $575 million charge for the company’s failure to disclose financial risks to investors.

Settlements and Litigation

In total, this particular defect cost General Motors more than $2 billion in settlements and fines (not including the cost to fix the close to 3 million recalled vehicles). Those who decided to sue the company instead of taking the original settlement may now be able to receive compensation from the more recent settlement. There are also an additional 400+ potential injury victims and their families who still need to seek justice from the company.

Enough to Address Wrongful Death?

Although several individuals connected with the fraud have been fired from General Motors, families and loved ones of the victims are pointing out that this is not enough to address a cover-up that caused many deaths. The challenge for many victims’ families and the federal prosecutors is the lack of federal laws covering disclosing motor vehicle safety defects.

Solnick & Associates

The auto accident attorneys at Solnick & Associates are prepared to handle any auto accident claim, including any associated wrongful death and associated settlements. We represent victims of car accidents and associated issues across Pennsylvania and New Jersey as well. Contact us today for a free consultation.