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General Motors Settles Ignition Design Defect Criminal Suit for $900M

Automotive design defects injure thousands of people each year, and many of them are the result of negligence on the part of a manufacturer. Federal laws require all automotive manufacturers to alert the National Highway Traffic Safety Administration (NHTSA) of a safety-related design fault or lack of compliance within 5 business days of its discovery, in order to expedite the recall process and minimize harm to the consumer. When auto companies fail to take proper action to recall dangerous vehicles and components, they place their own customers in danger, along with everyone else on the road. (National Highway Traffic Safety Administration)

According to federal prosecutors, General Motors (GM) has agreed to pay a fine of approximately $900 million in order to settle criminal charges related to the ignition design defects in their cars, which have been linked to more than 120 deaths.

During the initial three months of 2014, GM recalled 2.6 million of its small-engine vehicles due to potential safety hazards related to faulty ignition switches. The issue made it possible for ignition switches to be easily bumped, brushed or pulled from the ‘on’ position, to ‘accessory’ or ‘off,’ while the vehicles were in motion. This resulted in the disabling of the power steering and breaks, and also prevented airbags from deploying in the event of an accident. The cause of such failures has since been attributed to a lack of torque, or pressure, being supplied by the switch indent plungers in the vehicles, which was the result of an improper design.

This defect was not disclosed by GM, but was instead discovered by an attorney, who had sued the company on behalf of the family of a woman killed in an accident the ignition problem caused. It was found that GM had been holding meetings about the safety hazards of the issue as early as 2005, but had decided against a recall because it would take too long and cost an excessive amount of money. This delay cost many people their lives, and has been the basis for the filing of criminal charges. (NHTSA; USA Today)

The settlement reached between GM and the U.S. Department of Justice stipulates that no individual General Motors executives will face criminal charges at present, deferring prosecution in the case for a probationary period of three years; a fact that many victims’ family members believe to be inadequate. However, attorneys explained that GM’s failure to report information about the defect would be incredibly difficult to apply to individuals, due to the fact that it would involve proving to a jury what information each individual knew and when. They added that while good behavior after the fact does not absolve GM, or any other company of accountability, it is something that should be acknowledged, and is the reason this case has been settled after 18 months, rather than half a decade.

The agreement will require GM to hire an independent monitor to oversee its recall process, ensuring continued observance of federal safety reporting regulations. The company has also stated that it has reached a deal to settle a civil class action suit involving nearly 1,400 cases of death or serious injury, including recalls beyond the ignition switch issue. While they would not disclose a settlement amount in this case as of yet, GM is likely to pay upwards of $600 million to victims and their families, and spent an estimated $4.1 billion on the cost of 30 million additional car and truck recalls, not including the above fines. (CNN Money)

Our lawyers have represented product liability plaintiffs in the Chicago and greater Illinois area for more than twenty years, and in that time we have taken on several corporations and manufacturers for their negligence in marketing unsafe products to consumers. Our legal team has taken particular pride in ensuring that defective products were removed from the market, preventing them from causing any future pain and suffering. If you have experienced an injury or lost a loved one because of a design defect, we may be able to help you as well.