GM Faces Two Key Legal Tests Over Ignition Switch Defect
General Motors confronts two pivotal court battles in New York this week, as plaintiffs challenge its liability for injuries, deaths and lost vehicle value linked to faulty ignition switches.
General Motors enters a crucial week in US courts as two major legal proceedings begin in New York, both centred on the company’s handling of its defective ignition switch. The outcomes could shape the future of claims worth billions of dollars against the automaker.
Jury trial to test GM’s liability for accidents
Jury selection started on Monday in Manhattan for the second trial involving a crash allegedly caused by the defective ignition switch. The switch, which can slip from the “run” to “accessory” position, may cut power to the engine, airbags, brakes and steering. This defect triggered a 2014 recall covering 2.6 million vehicles and has been linked to hundreds of injuries and deaths. The first trial, which began in January, ended abruptly after allegations that the plaintiff gave misleading testimony. This week’s trial could be the first to see a jury decide whether GM is liable for failing to recall affected vehicles promptly.
If the jury finds GM responsible, it could set a precedent for future cases involving personal injuries and fatalities tied to the ignition switch. Previous settlements and ongoing litigation have already cost the company substantial sums. For background on earlier settlements, see GM Reaches Settlement in Third Ignition Switch Lawsuit.
Appeals court to decide on pre-bankruptcy claims
Separately, the 2nd US Circuit Court of Appeals is hearing arguments from plaintiffs seeking to overturn a bankruptcy court decision that blocked many claims relating to accidents and lost vehicle value from before GM’s 2009 bankruptcy. Under the terms of GM’s government-backed restructuring, “New GM” was largely shielded from liabilities tied to the “Old GM” era. Plaintiffs argue that GM’s failure to disclose the ignition switch defect during bankruptcy proceedings deprived them of the opportunity to seek compensation or influence the terms of the sale.
A decision in favour of the plaintiffs could open the door to a wider range of claims and increase GM’s financial exposure. The appeals court’s ruling is expected to have broad implications, not just for GM but for how future corporate bankruptcies handle undisclosed safety defects.
