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Products Liability: General Motors Pays $900 Million to Settle Defective Ignition Switches

Today, General Motors has agreed to a $900 million settlement and agreed to admit to misleading the public about vehicle safety amid defective ignition switches within some of their vehicles. This criminal settlement is just the latest announced by the Justice Department against corporations; which also includes Toyota and JPMorgan Chase.

Tied to over 120 deaths, problems with the ignition switch could shut off the car while it was being driven, disabling the airbag, power steering and power breaks. All of these malfunctions could lead to injury and even death, and although GM began recalling cars early last year, the delay in recalling the vehicles is the basis for the criminal charges.

For nearly a decade, General Motors employees concealed a potentially deadly safety defect from the National Highway Traffic Safety Administration. As early as 2002, before the switch went into production, GM engineers knew that it was prone to easy movement out of its “run” position into “off” or “accessory”, disabling the car’s front airbags. U.S. Attorney Preet Bharara, made a statement saying that “GM put its customers and the driving public at serious risk.” The settlement was disclosed Thursday by the Justice Department, and the Justice Department has agreed to defer prosecution in the case, essentially placing the company on probation for the next three years. If GM continues to cooperate with federal authorities, the case will be dropped. As of today, no criminal charges have been filed against any individual GM executives.

The CEO of GM, Mary Barra told employee’s “People were hurt and people died in our cars. That’s why we’re here today.” Under the settlement of criminal charges, GM will hire an independent monitor of its recall process to insure federal safety reporting regulations are complied with. The monitor will handle anonymous complaints via a toll free phone service.

Laura Christian, whose 16 year old daughter Amber Marie Rose was killed as a result of the defects, said that “while nothing can bring my daughter back, we need a system where auto executives are accountable to the public and not just corporate profits.” As a result, U.S. Attorney Bharara, said that the investigation into senior GM officials is continuing, and they won’t rule out charges against individuals at some point in the future.

GM also separately announced today a settlement to resolve a class action lawsuit filed in federal court in the state of Michigan by shareholders. GM’s agreement will cover about 1,380 potential deaths and personal injury claims and will pay out over $575 million to settle these cases, although the exact amount was not disclosed to the public. The company also set up a fund last year to compensate victims of car accidents related to the defect, for those who owned models including the Chevrolet Cobalt and HHR, Pontiac G4 and G5, and Saturn Ion and Sky vehicles.

If you or a loved one has sustained personal injury as a result of a product defect, please consider hiring a top State College personal injury lawyer to represent you. Negligence on the part of a car manufacturer can have devastating results, and you may be entitled to damages. The law firm of Rehmeyer & Allatt has extensive experience dealing with product defects, personal injury, car accidents, negligence claims and more so call today for a free consultation about your personal injury claim.