Is the GM Compensation Fund Fair?

After defective ignition switches in 2.6 million of General Motors Co.’s small vehicles caused airbags to fail, the nation’s largest automotive manufacturer is now offering victims and their families compensation, and may even offer increased payouts to victims who settled out-of-court before the recall.

According to the settlement plan, GM would provide compensation checks ranging from as much as $20,000 to several millions of dollars to any driver, passenger, pedestrian, or occupant of another vehicle who could prove their involvement in an accident caused by one of their defective vehicles.

According to compensation specialist Lawyer Kenneth Feinberg, who was specifically hired to design and administer the fund, the size of the settlement for anyone who died or suffered catastrophic injuries as a result of the defect would be based on the recipient’s age, medical expenses, family obligations, and earning power.

Individuals who have suffered terribly in this whole experience deserve prompt treatment of their claim, and we will do that,” said Feinberg.

A 10 year old paraplegic hurt in a crash caused by GM’s defect would be offered $7.8 million, according to the settlement fund.

While there’s no overall dollar limit to the program, it has a key condition that claimants must prove that their vehicle’s airbags failed to deploy. According to Feinberg, “If an air bag deployed, you’re out.”

Although GM did approve Feinberg’s plan, the automotive giant wasn’t too thrilled with some of the compensation fund’s terms.

When asked for a comment on Feinberg’s remark, GM spokesman Tom Henderson declined, instead deferring to a statement from GM chief executive Mary Barra, which read, “We are taking responsibility for what has happened by treating [victims and their families] with compassion, decency and fairness.”

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