General Motors to pay millions to families
Lawyer Kenneth Feinberg, a compensation specialist hired by GM to design and administer the fund, said that for those who were killed or suffered catastrophic injuries such as paralysis, severe burns, or amputations because of the defect, the size of the settlement would be based on their age, earning potential, medical expenses, and family obligations. For a 10-year-old paraplegic injured in a crash caused by the defect, the fund is offering $7.8 million.
In the case of less severe injuries, Feinberg said, settlements will be determined by the amount of time victims spent in the hospital or receiving medical treatment that began within 48 hours of an accident. Payments for that category of injury will range from $20,000 for those hospitalized for one night to $500,000 for those who were in the hospital for 32 days or more.
"Individuals who have suffered terribly in this whole experience deserve prompt treatment of their claim, and we will do that," Feinberg said during a news conference at the National Press Club in Washington on Monday.
GM has acknowledged that officials in the company knew about troubles with the ignition switch for more than a decade before the company ordered recalls beginning in February. The defect caused cars to inadvertently shut off, stiffening steering and brakes and causing air bags not to deploy.
Victims' families who accept the payments predetermined by Feinberg - which, for example, would result in $2.2 million being paid to the survivors of a 17-year-old student who had no children and was living at home when killed in a crash caused by the defect - could receive payments within 90 days after the fund begins accepting claims Aug. 1.
Victims who choose to proceed on a second track that would involve an economic analysis based on a more precise examination of their individual circumstances could expect their claims to be paid in six months, Feinberg said
Feinberg said he, not GM, would have final say on who gets paid what. He said GM has placed no cap on potential awards. He added that the automaker's 2009 bankruptcy, which provides a legal shield against court claims from previous accidents, would not be a factor in his claims process. Also, he said, unlike in a court proceeding, the claims process would not factor in whether drivers contributed to the injuries by, for example, speeding, texting, or being intoxicated when the accident occurred.
"One of the critical items in determining the success of a program like this is the speed of payments, as opposed to the American legal system," Feinberg said.
Feinberg said during the news conference that while GM did approve his plan, the company was not happy with all of the terms of the compensation fund. GM spokesman Tom Henderson declined to comment directly on Feinberg's remark, deferring instead to a statement from GM chief executive Mary Barra, who said GM took responsibility.
"We are taking responsibility for what has happened by treating victims and their families with compassion, decency and fairness," Barra said in the statement.