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GM Recall Crash Victims' Compensation Fund Announced

Attorney Kenneth Feinberg today announced the details of a compensation fund for victims of crashes due to the General Motors ignition switch recall. After Feinberg and his team evaluate each compensation claim, victims will receive payouts -- often multiple millions of dollars -- and GM cannot reject or alter the payment details.

The voluntary compensation fund means that a crash victim waives his or her rights to any further litigation over the ignition-switch issue. Victims, or their families, must prove that a problem with the GM ignition switch was the "proximate cause" of a crash that caused death or injury; GM has said the ignition-switch fault in small cars like the Chevrolet Cobalt and Saturn Ion, caused 54 accidents and 13 deaths. Feinberg said "contributory negligence," such as speeding or driving drunk, that may have led to the accident will be ignored.

However, Feinberg said in a press conference that the airbag must not have deployed in the crash in order to be considered. "If the airbag deployed, don't bother filing a claim," he told Automotive News.

All claims submitted to the compensation fund must include a police report about the accident and data from the car's Event Data Recorder (often known as a black box), as well as any other data about the accident, death, or injury.

The amount of money given out from the compensation fund depends on the status of the victim. For victims who were killed in or as a result of an accident with a car recalled for the GM ignition switch fault, Feinberg will award $1 million by default, plus $300,000 for the deceased's surviving spouse and $300,000 for each of his or her surviving dependents. On top of that, the compensation includes an amount for "lost income," calculated based on the deceased's past and predicted annual salary.

For victims who were seriously injured in crashes -- including amputations, brain damage, and serious burns -- Feinberg and his law team will determine the amount of compensation based on the cost of medical care, therapy, and other long-term care programs required. These victims will also receive compensation for lost income. Finally, there is a category for victims who sustained more minor injuries in crashes related to cars with the GM ignition switch defect. They will receive compensation based on how long they stayed in the hospital with their injuries, and in some cases for outpatient care.

Claimants can submit documents for compensation electronically or by mail, between August 1 and December 31. If a claim is found to be valid, compensation will be paid to the victim or his or her family 90-180 days later.

GM CEO Mary Barra said in a prepared statement, "We are pleased that Mr. Feinberg has completed the next step with our ignition switch compensation program to help victims and their families. We are taking responsibility for what has happened by treating them with compassion, decency and fairness. To that end, we are looking forward to Mr. Feinberg handling claims in a fair and expeditious manner."

The automaker previously fired 15 employees involved with the ignition switch flaw, and launched a new set of safety programs to more quickly address future recall issues.