A plan developed by attorney Kenneth Feinberg on behalf of General Motors (GM) to provide compensation for people killed in accidents caused by faulty ignition switches in some of the automaker's vehicles will offer claimants at least $1 million, plus other payouts.
Under guidelines for the so-called compensation protocol announced by Feinberg on Monday, families will be offered $1 million for the death of the victim, plus $300,000 for the surviving spouse and $300,000 for each of the victim's surviving dependents. Those payments are intended to cover "non-economic" losses, such as for emotional distress.
Claimants in the case can choose one of two compensation options for economic losses stemming from someone's death: "presumptive compensation," which looks at the victim's previous earnings, benefits, age and household to determine how much should be awarded, or request a "complete, comprehensive economic loss analysis" of the victim's past, present and assumed future income.
"We will work with claimants in an effort to [identify] claims eligible in meeting the proximate cause standard that ignition switches caused the accident," Feinberg said in a news conference in Washington to discuss the compensation plan. "It is a real challenge because of the age of the claims, some of them, but we will work with claimants."
The protocol takes effect August 1. GM has launched a website that describes the plan.
"We are pleased that Mr. Feinberg has completed the next step with our ignition switch compensation program to help victims and their families," said GM chief executive Mary Barra in a statement. "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."
Victims submitting personal injury claims are being compensated for economic and non-economic losses on a sliding scale, from $500,000 if they were hospitalized for at least 32 days, down to $20,000 for one overnight hospitalization.
Eligible claimants who were physically injured in an accident related to the ignition switches but not hospitalized overnight will receive up to $20,000 for medical treatment. The compensation plan also notes that, "because the physical injuries are so vastly different, and have significantly different long-term effects," each major injury claim will be evaluated to establish non-economic loss.
Those physically injured can also choose either the presumtive compensation or a complete economic analysis to deterimine payments for economic loss.
"This program is designed to help claimants," Feinberg said, noting that he is available to meet privately with victims' families or their lawyers who want to discuss a claim. "This program isn't designed to punish General Motors."
The automaker asked Feinberg, who previously helped develop compensation terms following the Sept. 11 terror attacks, BP oil spill and Virginia Tech and Aurora, Colorado movie theater shooting incidents, to come up with a compensation program that, in Barra's words earlier this month, will reach "everyone who lost a loved one due to this issue, or who suffered serious physical injury."
According to GM, at least 13 deaths and 54 accidents have been linked to the defective ignition switches, which if jostled can suddenly turn vehicles' engines off and cause them to lose power. The problem forced the company to recall 2.6 million Chevrolet Cobalt and other cars. Lawsuits against GM claim a death toll of around 60.
Earlier this month, Barra -- who became GM's first female chief executive just weeks before the ignition switch recall was made public -- disclosed the findings of an internal investigation that found a "pattern of incompetence and neglect" in the automaker's failure to recall the millions of vehicles with the faulty devices. The probe, headed up by outside lawyer Anton Valukas (pdf), also concluded that GM did not seek to cover up the defects and that largely absolved top managers at the company of blame.
The U.S. Transportation Department in May fined GM $35 million for the safety issues related to the delayed recall.