Early Lawsuits Regarding GM Ignition Switch Defect Often Fell Through Cracks In The Court System

Since General Motors began recalling millions of vehicles for defective ignition switches earlier this year, several reports have surfaced that show the car maker and federal regulators knew of the deadly issue but failed to address it. While they almost certainly dropped the ball, a new report shows that the country’s legal system also failed to protect consumers by creating an environment in which legitimate lawsuits involving deadly crashes of affected GM vehicles fell through the cracks for nearly a decade.

The New York Times reports that families who attempted to take General Motors to court after their children died in a crashes involving the company’s vehicles with defective ignition switches were either coldly rebuffed because the lives of their children weren’t worth the cost of litigation or settled their cases, barring them from discussing the issue in the future.

Brush-offs by law firms and settlements with strict restrictions to not discuss the defect highlight additional lost opportunities to sound the alarms regarding the deadly GM defect years before it would ever take the national spotlight.

These missed opportunities are a result of state laws that have capped awards for noneconomic damages such as pain and suffering, limited punitive damage awards or changed how liability is assessed.

These changes, critics tell the Times, often work against consumers and suppress vital information about product dangers.

The Times reports that factors such as tort reform and the rising costs of lawsuits have long diminished the legal system’s ability to bring risks like those of the GM defect to light.

Back in 2007, the family of a teenager killed in a 2006 crash involving a Cobalt was told by a local Wisconsin law firm that the value of their child’s life was too small to justify the expense and risk of taking on GM in court.

The value of the teen’s life was assessed at just $350,000, the maximum recovery of loss allowed under Wisconsin law. Because of this, the family was unable to proceed with their lawsuit, leaving the ignition issue uncovered.

Additionally, critics tell the Times that the ability of defendants to force plaintiffs to keep quiet about settlements regarding defective products also highlights the legal system’s failures when it comes to GM’s defect.

At the time the Wisconsin family attempted to bring forward their lawsuit, lawyers said they knew of six ignition-related lawsuits that GM had settled out of court. But reach of those settlements barred public disclosures about the issue.

By barring plaintiff discussion of the defect, GM made it increasingly difficult for lawyers handling new claims against the company to learn about previous incidents of defect crashes and fatalities.

Several families who had previously settled with GM confirmed to the Times that they were unable to speak about the defect publicly or they would risk losing their settlements.

“This is so frustrating to me,” the Wisconsin teen’s father tells the Times. “If we had gone to litigation, this would have gone to the forefront. We could have saved lives.”

The GM defect issues finally saw the light of day when a lawyer in Georgia – a state without strict caps on damages in product liability suits – filed a lawsuit against the the car maker in 2011.

The suit was successful in large part because GM lawyers did not move to settle the case since it involved a side impact collision, in which the car’s airbags were not expected to deploy.

The Times reports that this gave the plaintiff’s lawyer the opportunity to recruit an engineering expert who discovered the Cobalt’s ignition switch defect.

In 2013, following that engineer’s testimony and the testimony of a GM employee, the car company offered to settle the case for $5 million, as long as the family and lawyers never mentioned the defect.

Several months later – and years after the first ignition-defect related lawsuits against the company – GM publicly disclosed the defect for the first time and began recalling vehicles.

To date, at least 42 deaths have been linked to the GM ignition defect.

Victims of G.M. Deadly Defect Fall Through Legal Cracks [The New York Times]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.