A U.S. Senator has called on the Justice Department to require that General Motors create a compensation fund for victims who were injured or killed in one of the company’s 1.6 million cars that were recalled last month for faulty ignition switches.
According to the Detroit News, Senator Richard Blumenthal inquired Attorney General Eric Holder to get the DoJ to “immediately intervene on behalf of those injured and killed and all who suffered damages as a result of faulty ignition switches”.
General Motors came to an agreement in bankruptcy court restructuring that allows GM to only be liable for vehicles manufactured post-2009, so parties interested in suing GM for incidents which took place before then will have to go after the “Old GM” in bankruptcy court. However, GM is recalling the vehicles, with even CEO Mary Barra promising to restructure its recall and safety practices going forward in a video. But, nobody is going as far to say that GM will be compensating anybody.
“It is true that new GM did not assume liability for claims arising from incidents or accidents occurring prior to July 2009. Our principle throughout this process has been to the put the customer first, and that will continue to guide us,” GM spokesman Greg Martin told DetNews.
Part of Blumenthal’s request involved dismantling this immunity. He asked the DoJ to “oppose any effort by GM to deny responsibility for consumer damages.” This isn’t the first time Blumenthal has opposed the agreement, in 2009, he led seven other state attorneys in fighting against the measure which shielded GM from any actions taken by “Old GM.”
“Without your active involvement, they may have no meaningful remedy,” Blumenthal wrote in the request. “Given the crucial role the United States government played in creation of the current General Motors Corp., I believe the federal government has a moral, if not legal, obligation to take all necessary steps to protect innocent consumers.”
The DoJ is currently performing a criminal investigation to find out whether or not GM committed bankruptcy fraud by not telling consumers about the faulty ignition switch. The National Highway Traffic Safety Administration has also launched its own investigation into the matter to find out why the company delayed the recall when it knew a defect existed for as long as a decade. Meanwhile, GM CEO Mary Barra is scheduled to testify before a House of Representatives subcommittee next week in regards to the matter.