GM Sets No Cap On Payouts To Compensate Ignition Switch Victims; Claims Begin August 1

June 30, 2014

General Motors has received plenty of criticism for its handling of the long-delayed ignition switch recall at the center of "Switchgate" -- and rightly so. But the company's still-new CEO, Mary Barra, has been working to get out in front of the problem through a series of internal investigations, talks with victims, discussions with elected officials, and, more generally, an attitude of transparency.

Barra also brought in attorney Ken Feinberg -- the man behind the restructurings of GM and Chrysler during the Great Recession -- to determine appropriate means of compensating victims and their families. Today, he announced details of that compensation program and the launch of an associated website, GMIgnitionCompensation.com. Here are some of the high points:

1. There's no cap on the payout sum that victims and/or their families will receive from GM, or on the amount of the payout fund as a whole. 

2. Feinberg himself will be the sole decision-maker when it comes to determining who deserves compensation and how much they're due. Once Feinberg has issued a ruling, GM can't appeal if it believes the payout is excessive. (There's no word on how applicants might appeal if they believe the payout is too low, though.)

3. Those who filed suits against GM for ignition switch problems and settled out of court before the compensation program was announced can apply to the program.

4. Eligible applicants include drivers and passengers of cars on the official ignition-switch recall list, as well as pedestrians or occupants of other vehicles involved in an accident with one of the recalled vehicles (including rental cars). Applicants must meet the following criteria:

"In order to be determined an Eligible Claimant, you will be required to submit documentation to show that the Ignition Switch Defect in an Eligible Vehicle was the proximate cause of the accident causing death or physical injury, e.g., an official police report, the Event Data Recorder ("EDR") data captured by a vehicle's computer, photographs, insurance claim and report of the accident, repair and warranty records, etc. Additional required supporting documentation will be clearly defined on the Claim Form (available August 1, 2014)."

5. In making his decision, Feinberg won't consider any "contributory negligence" like drunk-driving or speeding that might've exacerbated the impact of an accident linked to a faulty ignition switch. The only thing that matters is the malfunctioning switch. 

6. The compensation program will begin receiving applications on August 1, 2014. All applications must be filed electronically or postmarked by December 31, 2014.

7. Anyone who receives funds through this program waives any right to sue GM for additional compensation.

Barra has issued a statement on the program: "We are pleased that Mr. Feinberg has completed the next step with our ignition switch compensation program to help victims and their families. We are taking responsibility for what has happened by treating them with compassion, decency and fairness. To that end, we are looking forward to Mr. Feinberg handling claims in a fair and expeditious manner."

There is much, much more information about eligibility, restrictions, payouts, and more on the compensation program website -- particularly the extensive FAQ

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