G.M. Hires Compensation Professional To Talk To Families With Claims (NYSE:GM)

General Motors has hired a compensation professional to help the company explore compensating victims of G.M. cars with a defective ignition switch. Kenneth R. Feinberg, an expert in victim compensation who has handled cases like the BP oil spill and the 9/11 fund, met with a representative of hundreds of people and their families who claimed to be affected by accidents involving the vehicles. How to pay people affected by the recalled vehicles has been one of G.M.’s most pressing issues.

For G.M., the ignition defect has become a public relations disaster and a huge financial drain. 2.6 million cars have been recalled because of the flaw and the company faces legal claims that could run into the billions of dollars. G.M. has linked 13 deaths and 32 crashes to the problem.

The meeting with Mr. Feinberg is the first step of the process of compensating people affected by the recall crisis sparked by the faulty switch. Also attending the meeting was Texas lawyer Robert C. Hilliard, who represents more than 300 clients with wrongful death or personal injury claims arising from the recalled vehicles. During the meeting, specific cases and specific dollar amounts were not mentioned.

According to Mr. Feinberg, hearing what the lawyers had to say was the main goal of the session, not to negotiate. Mr. Feinberg said, “The primary purpose was for me to listen as Mr. Hilliard and his colleagues explained the quantity and quality of his claims for physical injury and death only. The sole purpose was for me to listen.” The meeting lasted for nearly four hours.

Many believe that G.M. is trying to show that it intends to compensate accident victims and their families. Greg Martin, a company spokesman, commented, “We’ve taken responsibility for our actions and we will continue to do so. We’ve acknowledged that we have civic and legal obligations as they relate to injuries in accidents involving the recalled cars.” However, the company has recently moved to aggressively shut down other types of cases, including dozens of class-action lawsuits seeking compensation for economic losses like the diminished value of the recalled vehicles.