Owners of cars involved in General Motors’ wide-ranging ignition-switch recall may be out of luck if they want to sue the automaker. The Wall Street Journal reports that bankruptcy proceedings mean GM is safe from liability lawsuits over any accidents that occurred before 2009.
When the “old GM” was dissolved in bankruptcy in 2009, its responsibility for any product-liability lawsuits vanished as the company’s creditors broke up its remnants. The “new GM” established post-bankruptcy is still responsible for vehicles produced before 2009, but it cannot be held liable for accidents or injuries that occurred before then.
“It is true that new GM did not assume liability for claims arising from incidents or accidents occurring prior to July 2009,” a spokesman confirmed today in an emailed statement. “GM is focused on ensuring the safety and peace of mind of our customers involved in the recall… Our principle throughout this process has been to the put the customer first, and that will continue to guide us.”
The Journal reports that anyone pursuing litigation against “old GM” — that is, suing over something that happened before 2009 — must work with mediation lawyers and typically won’t receive much compensation. However, the automaker that most people recognize today as General Motors will only be subject to lawsuits if somebody was injured or killed in one of the affected vehicles after July 2009.
The GM ignition switch recall was first announced in February, covering 619,122 vehicles in the U.S. The problem stems from a faulty ignition-switch design, which can allow the switch to inadvertently move from “Run” to “Off.” That can stall the car while driving, possibly precipitating an accident. Worse yet, GM found that the ignition often toggled “Off” in an accident, disabling the airbags and thus increasing the severity of the accident.
Later in February, GM expanded the recall to cover a total of 1.37 million cars in the U.S. The automaker said that had reports of 31 crashes in which the airbags didn’t deploy because the ignition switch toggled off, and reports of 13 deaths due to the problem. The recall covers the 2003-2007 Saturn ION, 2006-2007 Chevrolet HHR, 2006-2007 Pontiac Solstice, 2006-2007 Saturn Sky, 2005-2007 Chevrolet Cobalt, and 2007 Pontiac G5.