GM Ignition Switch Defect Kept from Top Legal Counsel
General Motors CEO Mary Barra described the report released by former U.S. attorney last week as “deeply painful,” and as more details come to light, it’s clear why. Among the areas the report focused on was GM’s legal department. According to USA Today, Valukas learned that lawyers for the automaker never told General Counsel or top executives about the defective ignition switches.
GM Lawyers Settled Cases without General Counsel Approval
Over the years, GM settled various lawsuits connected to the faulty switches. Those settlements, according to the GM report, did not require approval from General Counsel Michael Millikin. Per GM policy, settlements up to $5 million dollars did not need such approval. So for years, Millikin was unaware of the problem that would grow to affect about 2.6 million cars and be the cause of at least 13 deaths and 54 crashes.
In fact, Millikin wasn’t informed of the problem until Feb. 6 – a week before the initial recall. It was at this time that one of GM’s top lawyers, Bill Kemp, as well as GM’s North American general counsel Lucy Clark Daugherty told Millikin about the defect. Kemp has since been identified as one of the 15 employees fired by Barra last week.
Fear of Uncovering Liability
One of the reasons why lawyers failed to investigate the problem was a fear of exposing liability. In his report, Valukas wrote, “Kent and Kemp mentioned that it was difficult to conduct an investigation when there is ongoing litigation regarding the same issue.” The concern was that an investigation would create documents that could later be used by plaintiffs’ attorneys in a product liability suit.
About the Ignition Switch Recall
In February, General Motors initiated a recall that would eventually cover 2.6 million older compact cars with defective ignition switches. Although GM knew about problems with the switches for over a decade, the automaker failed to take action to correct the issue. The faulty switches can be bumped or pushed out of the “run” position while the car is in motion, resulting in sudden loss of engine power and basic safety features such as airbags.
GM was recently fined the maximum allowed penalty of $35 million for the delayed recall. The company is still facing two congressional probes as well as criminal investigations for its failure to prevent numerous deaths and injuries.
GM Compensation Fund
Thomas J. Henry is representing more than 1,000 GM recall victims across the United States and has been investigating injuries and deaths linked to the recall since day one. The firm launched a nationwide media investigation into the recall in April, which brought forth thousands of affected individuals who had information critical to the investigation – information that the firm has handed over to federal agencies also investigating GM’s sluggish response the recall. As more and more individuals have flocked to Thomas J. Henry for representation, the firm has continued to push GM for a victim settlement fund. The firm has had several talks with GM’s victim compensation expert Ken Feinberg regarding appropriate victim compensation for the thousands affected by a fatal design flaw in ignition switches which left numerous dead and countless others seriously injured.
AUTOMOBILE ACCIDENT RESULT
$1.8 MillionExpenses: $20,000.00 | Attorneys Fees: $765,000.00 | Net to Client: $1 Million
AUTOMOBILE ACCIDENT RESULTS
$2 MillionExpenses: $78,475.96 | Attorneys Fees: $850,087.96 | Net to Client: $1,071,436.00
AUTOMOBILE ACCIDENT RESULT
$2.3 MillionExpenses: $200,000.00 | Attorneys Fees: $900,000.00 | Net to Client: $1.2 Million