A Simple Breakdown of the GM Ignition Switch Recall

You’ve likely heard all of the hullabaloo surrounding the GM Ignition Switch recall and would like it broken down into simpler terms (I know that I did). If so, this is the blog post for you. It was recently reported that GM paid out $594.5 million for 399 injury claims from the settlement fund it created. It is not the easiest process to understand, and you may wonder why GM set up a fund to pay out victims in the first place, rather than wait to be sued by these individuals.

The Backstory of GM’s Faulty Ignition Switches

Many General Motors vehicles had a faulty ignition switch in them, which caused the vehicle to spontaneously shut off. Obviously, when a vehicle spontaneously shuts off in transit, problems arise. Many of these defective ignition switches caused accidents, and if the car was off, then the airbags did not deploy, which caused serious injuries and deaths nationwide.

GM issued a recall and admitted that some of its vehicles were defective. Because they admitted that the vehicles were defective, GM set up a settlement fund to administer claims and pay those who suffered personal injuries and property damage caused in these accidents.

Why Liable Parties May Set Up Settlement Funds

You may wonder why GM did not wait for the lawsuits and deal with the claims that way.

The short answer is that the settlement fund process that GM set up is more efficient than litigation. GM will have saved money in the long term by agreeing to pay victims and not going through expensive litigation. One question that you perhaps have is whether people who have a claim should hire a lawyer to assist them in the claims process.

What Is The Claiming Process

Even though there is no explicit litigation involved per se, the process that GM set up is still a legal process. In exchange for the pay out, you give up your legal right to sue. The GM fund fits into a larger legal field outside of litigation referred to as Alternative Dispute Resolution. A lawyer can still assist in claims like these by assembling your claim for you in an efficient manner and negotiating with the claims administrators to makes sure you get the best settlement possible.

If you have been injured because of a faulty product and the company has set up a settlement fund, our office can help you through it. Give us a call!

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