General Motors has reached an agreement to accept responsibility for criminal charges of wire fraud and pay a $900 million fine for its role in concealing information from the government about defects in its ignition switches, according to recent reports.
As long as GM abides by the terms of the agreement, it is unlikely that criminal charges will be pursued against the company’s principals.
Beginning With A Class-Action Lawsuit
The road to criminal charges began years ago when important GM employees ignored evidence that the ignition switches in certain vehicles could slip out of the “run” position while the vehicle was in operation. This led to loss of control over the vehicle which caused many drivers to crash. These accidents led to many serious injuries and at least 169 deaths. The accidents also caused a massive recall of 1.6 million cars and led to both criminal and civil investigations and an internal probe into the company in preparation for hearings in Congress.
Many of the victims filed a class-action lawsuit against the company, claiming that the auto maker should have fixed the problem. The company was also the subject of a lawsuit filed in Texas last year claiming that the problem with ignition switches had caused many customer’s vehicles to lose value. In the course of the discovery process, evidence emerged that GM’s legal and engineering experts may have concealed their knowledge of the issue for up to a decade. This concealment led to the criminal charges that many principals at GM were facing. Additionally, evidence emerged that a simple fix, costing less than $1 per car, could have fixed the problem but the company chose not to pursue it.
Recalls and Settlements
GM is not the first car manufacturer to have faced legal issues for failing to address dangerous defects in its vehicles. In July 2015 the National Highway Traffic Safety Administration imposed a $105 million penalty against Fiat Chrysler for failure to provide recall notices, and in 2014 the Department of Justice settled with Toyota for $1.2 billion for misleading regulators about problems with its vehicles. This investigation was also the result of a class action lawsuit for $35.5 million brought about by Toyota’s shareholders over failure to disclose possible vehicle defects.
According to the terms of the company’s deal, an independent monitor will be appointed to supervise the company’s handling of future safety issues. The criminal charges, which included wire fraud and concealing information from the government, will be dropped after three years of full compliance by the auto manufacturer.
Many are angry that GM’s employees were able to escape criminal charges. The families of some victims have expressed outrage that none of those involved in the cover up will see jail time, while others point out that allowing GM to essentially buy its way out of criminal charges could set a dangerous precedent and send the wrong signal to other car manufacturers. GM has also announced that it will settle the majority of the civil lawsuits for the sum of $575 million.
Whatever the outcome of the criminal charges, the families of those injured or killed in these accidents will likely be compensated through civil lawsuits. For those who are facing the costs associated with injuries caused by a defective vehicle, a personal injury attorney may be able to help them recover compensation to pay for medical bills and other expenses as well as their pain and suffering.