GM will offer at least $1 million for each death determined to have been caused by a defective ignition switch in General Motors (GM) cars, the New York Times reports.
Ken Feinberg, a lawyer specializing in dispute resolution and a compensation expert hired by GM to determine payouts related to its massive recall, said the automaker will not cap the total amount of money it will pay to the compensation fund. He also said the criteria for deciding payouts will be broad and inclusive, a signal there are likely to be additional disbursements beyond the 13 deaths GM has publicly linked to a faulty ignition switch installed in 2.6 million GM cars.
“GM will pay all eligible claims,” Feinberg, who previously handled claims against BP Plc (BP) after the 2010 Gulf of Mexico oil spill, said. “If you already settled a case before you knew of the switch defect and signed a release, you can come back and get more compensation.” Feinberg said his goal is to pay valid claims within 90 days — 180 days in complicated cases.
GM announced recently that it now expects to spend $2 billion during the first half of the year to cover its recall costs. The company has announced plans to replace potentially faulty ignition keys on 3.37 million cars in North America. According to Barclay (BCS)’s Brian Johnson, GM could spend $3 billion. U.S. Senator Richard Blumenthal of Connecticut has urged the company to set aside as much as $8 billion.
GM shares were up a fraction in Monday trades.