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GM reaches deal over faulty ignition switches

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WASHINGTON: US auto giant General Motors has reached a settlement with hundreds of car owners in a lawsuit over faulty ignition switches linked to 100 deaths, the company’s lawyers said on Friday.


In a letter to a federal judge in New York, the lawyers said GM has “agreed to a private, confidential aggregate settlement” with 203 eligible plaintiffs.


The deal “potentially resolves hundreds of state court claims as well.”


The parties will work to document the deal in the next month, and “will then turn to implementing the settlement terms, which will take some time,” the letter said.


The defective switches would sometimes shut off unexpectedly during driving, and have been linked to more than 100 deaths and hundreds of serious injuries.


The issue potentially exposed GM to billions of dollars in claims.


The company declined to comment on the settlement, but had argued in court that its 2009 bankruptcy should protect the “new GM” from claims against the old company over the faulty switches.


But in late April, the US Supreme Court refused to hear GM’s appeal of a lower court decision rejecting the company’s claims.


Plaintiffs argued the company should be liable for the conduct of “old GM” because that company knew about the defect long before the bankruptcy.


The Second Circuit Court of Appeals in New York in July ruled in favour of the plaintiffs, saying consumer complaints were lodged as early as 2002.— AFP


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