GM Recall: Lawyers Are Talking, But a Settlement Remains Unclear

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The attorney hired by General Motors (NYSE:GM) has reportedly started meeting with a lawyer representing the plaintiffs in a suit pertaining to the company’s ignition switch recall to discuss what a potential settlement for claims would look like regardless of when the accidents occurred, Reuters reported Tuesday.

Attorney Robert Hilliard is the lawyer representing more than 300 people and families with claims for injuries or deaths due to the now-recalled vehicles (all 2.59 million of them), and told Reuters that attorney Kenneth Feinberg, who is representing GM, had initiated the meeting at Feinberg’s Washington office.

Feinberg, who has helped negotiate settlements and claims for events such as the BP Deepwater Horizon disaster and the September 11 attacks, acknowledged via email to Reuters that the meeting took place, but he declined further comment on the matter. However, his validation of the meeting suggests that the company is making meaningful headway in reaching out to the affected individuals and families, at least in some aspect.

The meeting seemed to be intended “to convince me they (GM) were going to do right” by people who were injured or killed as a result of the faulty switch, Hilliard told the publication, but he added that no agreement was reached on financial details. He said that would likely include General Motors assuming legal responsibility for injuries or deaths from all accidents, regardless of when they occurred, and, largely, the investigations aren’t done yet.

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The good news, though, is that Hilliard expects a decision within days or weeks, not months. The recall issue really blew up in January, days after now-CEO Mary Barra took the helm from Dan Akerson. By mid-February, the recall doubled in size and doubled again in March. Not helping GM’s situation were other smaller recalls being made simultaneously. All told, General Motors has recalled well over 6 million units so far this year.

Concerns over GM’s status post-bankruptcy have made many wonder if there would be a sort of compensation fund established for victims of the crashes. Legally speaking, the company that emerged after the federal government stepped in is a different entity than the pre-bankruptcy company, and it is therefore not liable for the accidents, many of which occurred prior to when GM went south.

Hilliard told Reuters that he did not believe General Motors would assert that defense against victims of older accidents. Feinberg reportedly “agrees bankruptcy isn’t an issue for these injuries and death,” he added, per the news service. 

GM is now caught between doing right by its customers and the victims (and victims’ families), and taking a tougher stance on plaintiffs bringing proposed class action suits to recoup monetary losses on recalled vehicles, such as reduced resale value or loss of the use of their cars, Reuters reports. The finesse employed in this situation will likely be key to General Motors’ reputation later on and become an integral part of Barra’s legacy.

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