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Plaintiff’s bar eyes GM over recall issues

Could lead to the most expensive civil case in U.S. history

Following a litany of investigations, audits, reports and admissions of failure, it was only a matter of time before the plaintiff’s bar was stirred to action against General Motors for its delayed recall of faulty ignition switches. A new report last week, which resulted in the termination of 15 GM managers, may be the straw to break the proverbial camel’s back. While a multitude of suits have already been filed, the report could mean a deluge of additional litigation, and when the smoke clears, the resulting payout could rank among the most expensive civil cases ever.

Over 80 complaints have already been filed as a result of the ignition switch recall. Most seek damages for accidents or the reduced resale value of a vehicle. The Wall Street Journal reports that absent injury claims, depreciation pay outs could range between $500 and $1000 per car.

As for the personal injury claims, the WSJ said that in 2010, King & Spalding LLP concluded as counsel for GM that in one wrongful death case filed in Tennessee that a "seven-figure verdict remains probable" even though "Nashville area jurisdictions are not 'judicial hellholes.' "

The ignition switch issues are blamed for 54 accidents and 13 deaths.

While GM CEO Mary Barra has stated that she is unwilling to speculate on the cost of litigation, in her remarks regarding Anton Valukas’s report, she said that it had shown a "pattern of incompetence and neglect" and that the company would “do the right thing by victims.”

High profile issues like this can be like blood in the water for the plaintiff’s bar. Vincent Galvin Jr., executive managing partner at product liability firm Bowman and Brooke, said in a recent InsideCounsel feature that media exposure following an event like this can frequently lead to problems for the companies involved. “Depending on the nature of the accident, the nature of the recall, or the services enhancement campaign, the plaintiff’s bar looks at that as an opportunity to develop cases or create cases. What happens then is the plaintiff’s bar mobilizes,” Galvin says.

 

For more on recall and reputation, check out these stories:

Corporate culture is more important than the choice of CEO at many companies

Bankruptcy court may play a key role in GM class-action lawsuits

Managing your company’s reputation online: Unmasking anonymous posters through defamation lawsuits

Executive Editor

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Chris DiMarco

Chris DiMarco, Executive Editor of InsideCounsel magazine, has a background in multimedia production with previous involvement in projects in which he developed and created content...

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