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What to Know About GM's Compensation Fund

Just hours after GM announced its plan to compensate victims of accidents involving defective ignition switches, the automaker recalled a whopping 8.2 million more vehicles. This raises the total number of cars recalled to 29 million, more than the 22 million vehicles recalled by all automakers combined in 2013.

Since this public safety crisis began in Feburary, GM has recalled these cars because the ignition switches have the potential to turn off, causing drivers to lose control and preventing airbags from deploying. The company was already fined $35 million earlier this year by the NHTSA for having knowledge about the defects but not informing consumers until far too late. It is still unclear how many have died or been injured in related accidents, but I'm confident that there are many more accidents and victims than anyone realizes.

To oversee the massive undertaking of compensating victims, GM has tapped Kenneth Feinberg, a lawyer who performed similar duties for 9/11 and the BP Oil Spill. According to Feinberg, victims of crashes involving one of about two dozen recalled vehicles in which the airbags did NOT deploy may now file a claim with GM, which will be processed within 180 days. GM has reportedly placed no limits on the amount Feinberg can pay out to claimants, and in this video he says that he will make similar calculations to those that would be made in court, regarding pain and suffering, economic losses, and several other factors.

From my perspective as a lawyer who has litigated these types of cases against big automakers, I believe that this fund may be a good -- and likely faster -- option for some who have been victims of GM's colossal missteps. But before you go filing a claim, here are a few things you should know:

Once you accept a compensation offer from this fund, you then sign away your right to sue GM. The idea is that GM doesn't want to compensate individuals who are then going to turn around and sue them for more money. However, as Feinberg has stated, you can file a claim and then decide to accept an offer or not. It is only once you accept the offer that you waive your right to take legal action against the company.

Each and every case is different, and each and every case warrants different compensation. Two wrongful death claims may demand vastly different compensation amounts depending on the age of the victim, any dependants, the victim's potential earnings, etc. A certain amount of money could be generous in one instance and drastically insufficient in another. The Law Office of Scott Righthand can help you decide whether or not to accept an offer.

Any driver, passenger, or pedestrian involved in one of these accidents is eligible to file a claim. It doesn't matter if you were in a defective GM car or hit by one. Either way, you are eligible for compensation, either through this fund or potentially by suing GM.

Be aware that by filing a claim with GM, you will most likely receive an offer that GM believes will be sufficient to adequately compensate you or your family. In a court of law, you leave this decision to members of an impartial jury. Of course, that doesn't necessarily guarantee a better outcome, but in some instances it may.

This brings me to my final, and perhaps most important point: GM's compensation fund does not appear to include punitive damages. In other words, if you're looking for GM to pay additional dollars out of its deep pockets as punishment for deliberately misleading consumers for more than a decade - which, let's be honest, is exactly what they did - you're in the wrong place. This could be one major reason why going to court may yield a better result. Juries have the ability to award punitive damages if they so choose.

There will be some balancing and decision-making required here. If you were at fault for the accident or intoxicated, you may be better off to work with the GM claims people. If the injury was all about GM's product, and the injuries are significant, perhaps not.

As I mentioned before, it's a good idea to seek advice from a product liability lawyer if you are considering filing a claim with General Motors. For a free legal consultation, please don't hesitate to contact the Law Office of Scott Righthand.

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