GM exploring compensation fund for victims of defective cars, says Feinberg
Lawyer Kenneth Feinberg says GM asked him to "help develop some sort of program that might be used to compensate eligible claimants."
NEW YORK (Reuters) -- A lawyer for General Motors Co. said for the first time this week that the company is moving to develop a program that could compensate individuals affected by a faulty ignition-switch in millions of recalled vehicles.
The lawyer, Kenneth Feinberg, said in an interview on CNBC that, based on his initial conversations with GM, "they are asking for me to help develop some sort of program that might be used to compensate eligible claimants."
GM CEO Mary Barra said in testimony before Congress on April 1 that the company had hired Feinberg to help explore its options following the recall. GM since then has declined to say whether it would be creating some kind of victims compensation fund, which some members of Congress and consumers have been pushing for.
Feinberg said on Wednesday, "Now who's eligible; whether there will be a fund; how much money; what is the definition of how you are going to calculate the damages, or what proof will be required all remain to be seen."
Since February, the company has recalled 2.6 million vehicles and faced an increasing number of lawsuits on behalf of individuals injured or killed in crashes, as well as customers who say their cars lost value as a result of the recall.
In a related development on Wednesday, GM said it would ask a federal court to bar lawsuits related to actions before its 2009 bankruptcy, signaling a tougher stance toward legal claims stemming from the recall.
Feinberg told CNBC it could be several weeks before the actual structure of any program is clear, according to a transcript.
Feinberg is known for his work in administering compensation funds for victims of high-profile disasters, including the Sept. 11, 2001, attacks and the BP Plc oil spill in 2010.
GM declined to comment directly on Feinberg's remarks. A company spokesman, Greg Martin, said in an e-mail that the company recognized that it has "civic and legal obligations in regard to this matter," and had tapped Feinberg to help them explore them.
Feinberg could not immediately be reached for comment.Contact Automotive News