GM’s controlled compensation plan shows many problems

Now, for the latest update in the continuing saga of General Motors.

General Motors has just announced a new compensation plan for injured families and those suffering the wrongful death of loved ones because of the known dangerous defects that GM marketed in at least eight million cars. They hid those dangers from the public and regulators. Now, by using the bankruptcy court and the federal government bailout, GM is claiming special immunities granted only to them for protection from judgment in a court of law and in front of the juries that our founders believed are essential to democracy. GM is still attempting to whitewash this episode and hide their wrongdoing from the public. In addition, even in the compensation plan that they have announced, they still fail to include all of the families and all of the injuries that have occurred because of their dangerous conduct.

Georgia lawyer Lance Cooper and his remarkable engineering team were the first to determine that GM had secretly altered, and attempted to fix, one of the major defects without telling the government and the families what had occurred. Through the discovery in that case, the Cooper Law Firm determined exactly what the nature of the defect was. After reviewing the compensation plan, Cooper noted that at least one million of the vehicles GM has had to recall are excluded from the compensation plan.


It is also not clear whether GM intends to drop their statute of limitations and bankruptcy defenses in lawsuits by those consumers who will still retain a right to file lawsuits for these injuries and deaths. Stay tuned for more on that.

There is one other major problem with the compensation plan: Kenneth Feinberg will be the sole judge and jury of these claims. It is presumed that none of the information that relates to GM’s wrongdoing will become public during this process in the same way that it would during the discovery process. Just as importantly, Feinberg is working for General Motors. There are significant questions as to whether the privacy rights of the medical records and information that is provided to him will remain out of the view of GM. The Center for Justice & Democracy’s Executive Director, Joanne Doroshow, has urged that Feinberg publicly release his contract with GM so that we can understand the full extent of the ethical standards and relationships. We couldn’t agree more.

This whole sad and sordid situation continues to reinforce the notion that our civil justice system is fundamental to protecting American consumers and families and shining light on the wrongdoing of corporations. It is through the civil justice system that these dangers become known to the public and to regulators. Failing to protect this system will continue to allow corporate wrongdoing to stay hidden from us, even when it results in serious injuries and deaths.


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