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GM compensation program proving to be a mixed bag

The story has largely faded from the headlines, but the aftermath of the General Motors recall scandal continues. About a year ago, GM officials announced a recall that would later expand to about 2.6 million vehicles. The problem was an ignition switch that could too easily be jostled from the "run" position to the "accessory" position. This can disable the engine, power steering and air bags.

The nation soon learned that certain GM employees had known about the defect as far back as the early 2000s. And rather than defend lawsuits individually, GM decided to start a compensation fund run by high-profile attorney Kenneth R. Feinberg.

According to reports in the New York Times, Mr. Feinberg has made confidential compensation offers on approximately 93 claims involving a death or serious injury. None of these offers have been officially rejected, but close to half of offer recipients are still considering.

In many ways, the GM compensation fund is giving victims and their families some closure and a quick response to a process that would normally take years. And those with some inside knowledge of the fund say that for the most part, the offers made to the families of deceased victims are fair and reasonable.

But in other ways, this compensation program limits the options of many individuals with legitimate injury claims. It seems as though some claimants are able to appeal for higher offers if they have their own attorney to help. But other claimants seem to be receiving take-it-or-leave it offers that are far too low to even recoup what they spent on medical bills - not to mention other costs related to their car accidents.

It could be argued that General Motors is perhaps the biggest "winner" in all of this. The company managed to hide a serious vehicle defect for more than a decade and will now take care of a significant number of death and injury claims without ever setting foot in the courtroom.

Some victims and their families will no doubt choose to pursue their own lawsuits, spurred by lowball compensation offers and a desire to truly seek justice in response to GM's negligence. At the very least, we have to hope that both GM and nation have learned from this experience. If we allow GM to settle its claims and get back to "business as usual," there is little doubt that this recall disaster will be repeated in the future.

Source: The New York Times, "G.M. Victim Compensation Program Seems on Track," Hilary Stout, Feb. 2, 2015

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