Auto industry giant General Motors is scheduled to be in court in New York next January to defend six personal injury claims involving a flawed ignition switch. Legal experts say the outcome will be critical—a finding that GM was liable could open floodgates and cost the automaker billions of dollars.
General Motors has admitted that it built thousands of cars between 2005 and 2010 that had faulty ignition switches, which would cut off power to the vehicle’s engine without warning. An expert hired by GM says that at least 124 deaths have been tied to the defect, with another 275 injuries reported. GM initially claimed that only 13 people had died because of the faulty switches.
Thus far, GM has paid nearly $1.5 billion in fines and settlements tied to the product defect. The company settled a shareholder lawsuit earlier this month for $575 million and paid a $900 million fine to resolve a criminal investigation by the federal government. Legal experts estimate that, should the New York juries find in favor of the plaintiffs, GM could pay up to $10 billion in judgments or settlements.
According to the federal criminal investigation, GM engineers knew as early as 2002 (when the switch first went into production) that it had the potential to slip out of the “run” position. The fix would have cost GM about a dollar per vehicle, but the company opted not to address the problem. The company also discovered, in 2012, that the defective switch could cause a failure of airbag deployment, but did not notify federal safety officials for nearly two years.
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