Senators Urge GM To Extend Deadline For Filing Ignition Switch Claims

With just three days left before General Motors’ self-imposed victim compensation claim deadline, two senators are encouraging the car manufacturer to extend the cut off beyond January 31.

In a letter to GM CEO Mary Barra, Connecticut Senator Richard Blumenthal and Massachusetts Senator Edward Markey urge the company to reconsider the arbitrary deadline associated with the GM ignition switch compensation fund, saying victims need more time to make a meaningful choice between accepting payments or pursuing legal action.

The victims’ compensation fund was established in August by GM to compensate those hurt or the families of those killed, as a result of a defective ignition switch that can allow the key to turn off the car accidentally, disabling power steering and airbags.

“While we appreciate your company’s voluntary commitment to the compensation fund, to truly live up to the promises you have made to the American public in the wake of the ignition switch recalls, G.M. must reconsider the deadlines associated with the fund,” the senators write. “GM should either commit to waiving its bankruptcy shield in all pending legal actions, or permit all victims who qualify for the fund to postpone their acceptance of their compensation until the completion of the Department of Justice investigation and the ruling of the bankruptcy court.”

Before it opened the fund up to claims, GM had only acknowledged 13 deaths tied to the defect.

To date, the fund has approved 50 death claims, seven catastrophic injury claims and 68 minor injury claims. In all, Kenneth Feinberg, the fund manager, announced on Monday that the program has received more than 3,000 claims.

Of those claims, 338 were for death claims and 224 serious injuries. Feinberg says he has deemed 386 ineligible, including 58 death claims, while 802 claims are still under review and 847 were submitted without documentation.

So far, the fund has made 65 offers for compensation, of which 41 have been accepted. No offers have been rejected, the Detroit News Reports.

Initially, the fund established a deadline of December 31. However, that cut-off was extended in mid-November following increased pressure from lawmakers and safety advocates over possible issues with notifying owners of affected vehicles.

In fact, Feinberg cited the fact that at least one of the 13 deaths originally linked by GM to the defect wasn’t aware of the compensation program in his announcement of the deadline extension. At the time, he said the company would send notification to 800,000 additional consumers.

Blumenthal and Markey argue similar points in favor of a second extension. The senators also cited the ongoing criminal investigation into GM’s conduct by a federal grand jury, arguing that victims can’t decide where to accept GM’s settlement until that probe is completed.

Under the compensation plan’s rules victims only have 90 days to decide whether to accept payment through the fund and waive any future legal rights associated with their claims, regardless of new information or changed circumstances.

“Victims that qualify for compensation must have a meaningful choice between accepting restitution through the fund or pursuing their claims in court, and that choice can’t be made until they have all the information necessary to decide whether to waive their legal rights to pursue litigation at a future date,” the letter states.

The compensation program covers approximately 1.6 million model-year 2003-2007 recalled vehicles manufactured with an ignition switch defect and approximately 1 million model year 2008-2011 recalled vehicles that may have been repaired with a recalled ignition switch.

Feinberg has said that it could take as long as six months to complete the review of all applications once the final claims are submitted.

Officials with GM previously said they expect to spend $400 million on claims, but that the figure could rise as high as $600 million.

In letter to GM CEO Mary Barra, Blumenthal, Markey call on automaker to extend January 31 deadline for victims to apply for compensation fund [Sen. Edward Markey]

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