By Jeff Gilbert

WASHINGTON (WWJ) – As General Motors begins paying out settlements to victims of its delayed ignition switch recall, the man running that fund says the goal is to make sure everybody who suffered is compensated.

“Money is a pretty poor substitute for loss,” says attorney Ken Feinberg, who has laid out the criteria for paying out claims.

Feinberg has laid out a formula that will pay out settlements based on whether there was a death or injury, the severity of the injury and a number of other factors. Many of the individual claims will top a million dollars.

The total will likely be in the billions, but Feinberg declined to give an estimate. He said that drivers, passengers, people in other cars and pedestrians will be eligible for claims, as long as they meet the criteria. There is no cap on payouts.

“GM basically has said wherever it costs to pay all eligible claims under the protocol, they will pay it,” said Feinberg. “There is no ceiling on the aggregate dollars.”

GM’s bankruptcy will not be used as a shield in this case, says Feinberg, meaning claims for events that happened before the 2009 bankruptcy will be handled the same as those that occurred after.

But, Feinberg stressed that this is only for people who were injured or lost loved ones, not for those who suffered economic damages. GM has been using its bankruptcy to try to fight cases that claim people’s vehicles or stockholdings have lost value due to the recall.

Claims will be accepted from August first through the end of the year at The website details all of the criteria, which include having the crash involve a vehicle that was part of the GM recall, and having the airbag not deploy.

“GM’s compensation plan for victims of the ignition switch recall appears aggressive and comprehensive,” said Kelley Blue Book analyst Karl Brauer. “The dollar figures appear in line with similar payouts for other victim funds, and the plan’s speed and flexibility in making the payouts suggests GM’s desire to quickly compensate victims. Any dollar figure, ultimately, is a poor substitute for lives lost, but at this point, it’s the only recourse available to both GM and these victims.”

The behavior of the driver, Feinberg says, will not factor into the compensation.

“We can’t bring people back” he said. “We can’t restore limbs. It’s the best we can do. And it’s a pretty poor substitute.”

People who have already settled with General Motors will have the right to tear up that settlement, and accept compensation from the fund. Those who accept settlements, Feinberg says, will not be required to sign confidentiality agreements.

GM will not have a right to challenge Feinberg’s judgement. The company, in a statement, said it has trust that Feinberg will do right by those who were harmed.

“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,” read the brief statement. “To that end, we are looking forward to Mr. Feinberg handling claims in a fair and expeditious manner.”

General Motors chose Feinberg because of his expertise in compensation matters. He administered compensation funds for victims of 9-11, as well as those hurt and killed in the Boston Marathon bombings.

In the 9-11 compensation cases, families of those who died received an average award of $2.1 million. The average settlement for those who were injured was $400,000.

While victims will have the right to sue General Motors, Feinberg says in other events, the vast majority of people have gone with the voluntary compensation.

But, says Feinberg, those who are looking for more than compensation–for punitive damages or to send a message–may be better off going to court.

“I’m here to compensate victims, not punish General Motors.”

Connect with Jeff Gilbert
Twitter: @jefferygilbert


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