Joanne Doroshow, executive director of the Center for Justice and Democracy at New York Law Shcool, said her group is “cautiously optimistic” with the GM’s retention of Feinberg.
DETROIT, MI - A consumer advocacy group that has been critical of high-profile attorney Kenneth Feinberg’s involvement in handling claims in the wake of the BP Deepwater Horizon oil spill is calling for oversight as General Motors weighs its own response to the recall of a deadly vehicle part malfunction.
Joanne Doroshow, executive director of the Center for Justice and Democracy at New York Law School, said her group is “cautiously optimistic” with GM’s retention of Feinberg.
“We’re cautious because his experience with the BP Gulf (of Mexico) oil spill and him running the claims down there was extremely controversial,” Doroshow said.
A federal judge in 2011 ruled that Feinberg had to change the way he was communicating with claimants as he oversaw a $20 billion escrow fund to reimburse victims of the ongoing disaster in the Gulf of Mexico. Feinberg was telling claimants he was independent while having them sign agreements to not sue the company, when he was, in fact, being compensated by BP.
“We’re also a little concerned with the fact that he would be on GM’s payroll, working with the company, and making these decisions, and therefore there has to be clear oversight of this process,” Doroshow said.
GM has not yet said whether it will set up a fund for families of the victims of its ignition switch recall. The faulty ignition switches have been linked to 13 deaths and 31 crashes, and company CEO Mary Barra has been on Capitol Hill this week facing questions from members of Congress over the issue.
In the past, some companies that have gone bankrupt set up trusts to pay out pending claims against them. GM did not do so in its 2009 bankruptcy, but the company was cleared of any pending litigation against it by the federal bankruptcy process.
Members of Congress and family members of some of the victims of the faulty ignition switch have urged the automaker to establish a victims’ compensation fund. The hiring of Feinberg, an attorney who has become the go-to guy in terms of handling compensation in the wake of major American tragedies, indicates the company could be moving in that direction.
In addition to the BP oil spill, Feinberg has overseen billions of dollars in compensation in the Sept. 11 terrorist attacks, the Virginia Tech school shooting and the Boston Marathon bombing.
“My mandate from the company is to consider the options for dealing with issues surrounding the ignition switch matter, and to do so in an independent, balanced and objective manner based upon my prior experience,” Feinberg said in a release from GM.
The 2.6 million vehicles, including 2.2 million in the U.S., affected by the ignition switch recall include 2003-2007 Saturn Ions, 2007-2010 Saturn Skys, 2005-2011 Chevrolet HHRs, 2006-2010 Pontiac Solstices, and 2005-10 Chevrolet Cobalt and Pontiac G5 models.
In the first three months of 2014, GM has recalled a total of nearly 7 million vehicles worldwide, which is just less than the previous four years combined.
David Muller is the business reporter for MLive Media Group in Detroit. Email him at dmuller@mlive.com or follow him on Twitter or Facebook.