By Jeff Bennett
Five people who brought injury claims to General Motors Co.'s
compensation fund as a result of defective ignition switches have
rejected settlement offers, likely paving the way for future
lawsuits against the nation's largest auto maker.
The rejections are the first publicly disclosed in what has been
a steady stream of settlements offered by the fund since its
creation last year. The fund, administered by compensation experts
Kenneth Feinberg and Camille Biros, closed the claim window on Jan.
31. Ms. Biros and Mr. Feinberg now are working through those claims
to determine eligibility in injuries or death connected with faulty
ignition switches installed in 2.8 million older GM cars.
"In a sense, it is a bit surprising as these rejections are
lower-end Category 2 claims," Ms. Biros said. "These amounts are
clearly spelled out in the facility's protocol and are based
strictly upon the number of nights of hospitalization or
out-patient treatment."
The fund processes claims under death, major physical injuries
such as loss of limbs, and minor injuries, or those not requiring
hospitalization. Payouts for major injuries can range between
$20,000 and $500,000 based on the number of days spent in the
hospital, Ms. Biros has said. Those not hospitalized can receive
less, based on the formula used by the experts.
Despite the rejections, the fund has been successful in limiting
much of GM's exposure to litigation since those who accept the
payouts must waive their rights to sue the company.
The fund has received a total of 4,343 claims, of which 161 were
determined to be eligible, 715 ineligible and 1,089 deficient. It
will take weeks before Ms. Biros and Mr. Feinberg are done
evaluating the claims.
In an earlier interview, Mr. Feinberg said most claimants are in
their early 20s because many of the affected vehicles--older Saturn
Ions and Chevrolet Cobalts--were sold to young people. Many
accidents included other potential causes, such as speeding,
drinking or distraction, he has said.
GM has set aside as much as $600 million to handle the
claims.
The rejections were reported earlier by the Detroit News.
Write to Jeff Bennett at jeff.bennett@wsj.com
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