GM to Pay $900 Million to Settle Criminal Ignition Switch Case

This week the Justice Department announced a settlement with General Motors Co. (GM) after an 18-month criminal investigation into the auto makers handling of a faulty ignition switch.

Although no individuals were charged, GM was charged with one count of wire fraud and one count of engaging in a scheme to conceal a deadly safety defect. The company agreed to a deferred prosecution in which it must pay $900 million and hire an independent monitor of future recalls to ensure it remains compliant with federal regulation.

If the company has adhered to the agreement after three years of federal oversight, the case and all criminal charges will be dismissed.

Investigations determined that GM employees knew about the faulty ignition switch for more than a decade and did not notify regulators or consumers about the problem.

Many victims and their families were disappointed in the outcome of the case. The record penalty that a motor company has paid was $1.2 billion paid by Toyota last year.

GM also announced this week that it settled a class action lawsuit that included about 1,400 victims. Although the amount of the settlement was not disclosed, the company said that it would require $575 million to cover both the civil and criminal cases.

Through a $625 million compensation fund set aside by GM earlier this year, the company has also agreed to compensate 124 death claims and 275 injury claims. Families of deceased victims will receive at least $1 million.

The injury lawyers at Anderson, Cummings & Drawhorn believe in holding negligent companies accountable for their actions. If you have been injured by a defective product, we will help you fight for the compensation you deserve.

Call (817) 920-9000 to determine if you have a claim.