Product Liability Law Blog

Last week, a number of car accident victims and their families traveled to Washington DC to ask lawmakers for help. As injured parties, they want to make sure that they will still receive compensation for their products liability and personal injury claims even though General Motors Corp. and Chrysler LLC have filed for Chapter 11 bankruptcy.

Bankruptcy proceedings generally place a temporary freeze on civil lawsuits, and plaintiffs end up becoming one of many unsecured creditors waiting to divide up whatever funds are left after the debts owed to secured creditors are paid off first. For auto products liability victims that were catastrophically injured in a GM or a Chrysler motor vehicle—and currently uninjured motorists that could get hurt in a defective GM or Chrysler car in the future—this outcome could pose a huge financial concern.

About 500 to 1,000 people are seriously injured or killed in auto products liability-related motor vehicle crashes each year. Approximately 300 Americans are currently suing Chrysler for products liability, and some 1,200 others are suing GM.

In New York, consumer groups are appealing the sale of Chrysler to Fiat because the new company isn’t going to be responsible for the old company’s losses, including personal injury settlements and verdicts. Center for Auto Safety Executive Director Clarence Ditlow wants the bankruptcy system or the Obama Administration to make sure that Chrysler and GM products liability victims and their families are taken care of. Meantime, the Center for Justice and Democracy want the two motor vehicle manufacturers to buy retroactive insurance polices that would cover past and future claims.

Among the victims that are fighting to recover the compensation they are owed:

• Couple Joseph and Jeanne Polio were hoping to obtain products liability compensation because Jeanne sustained catastrophic injuries during a 2005 rollover accident involving a Chrysler SUV. She now suffers from a spinal cord injury and is paralyzed from the waist down.

• 37-year-old Mark Noveck, who became a quadriplegic in a GM SUV rollover accident, settled his products liability lawsuit against the auto manufacturer right before the company filed for bankruptcy. His products liability lawyer says the $999,999 settlement was a form of “surrender” because it was better than possibly not getting anything.

Families and Severely-Injured Victims of Defective GM and Chrysler Cars Travel to Washington to Seek Urgent Help, Red Orbit, June 3, 2009

Chrysler bankruptcy stalls couple’s product liability case, NH Register, May 26, 2009

Injured little girl facing uphill fight in lawsuit against reeling GM, Daily News, May 26, 2009

Related Web Resources:
Chrysler Bankruptcy and Product Liability, NY Times, May 20, 2009

GM rescue dumps crash victims, Asiatimes.com, June 9, 2009