In early 2014, General Motors (GM) began recalling 2. 6 million Chevy Cobalts, Saturn Ions and other small cars
because they had defective ignition switches. The switches were
prone to accidentally turning off the cars’ engines while they
were in motion, disabling the cars’ airbags, power steering and
power brakes in the process. At the time, GM attributed 13
deaths to the faulty ignition switches.
GM and the ignition switches were the subject of an internal
investigation, congressional hearings and criminal inquiry
by the Department of Justice. Among other things, these
investigations revealed that various individuals within GM had
known about ignition switch problems for more than a decade.
By April 2014, GM had hired Kenneth Feinberg to help
manage the claims against the company. Feinberg developed a
formal protocol for how GM would process and assess claims for
compensation. The process was open to people injured or the
families of those killed in any accident that occurred before Dec.
31, 2014; involved one of the recalled vehicles; and in which the
air bags failed to deploy. Claimants were required to prove that
the faulty ignition switch had caused the death or injury; driver
negligence was not to be taken into account. By the Jan. 31, 2015,
deadline for filing a claim, 4,342 claims had been filed.
Claimants were not required to release their right to sue GM
in court in order to file a claim, but were required to release
this right upon accepting an award from the fund, a decision
that they would have 90 days to make. Individuals who had
already settled with GM were also allowed to file claims; any
pre-existing settlement amount would be deducted from the
award amount determined by the protocol. No cap was placed
on the total amount of money that Feinberg could distribute to
claimants; he was given sole discretion in making awards, and
GM did not retain any right to appeal his decisions.
The GM claims resolution process is just one example of a
process designed to settle large numbers of civil claims against
a defendant. Within the court system, class action lawsuits and
cases consolidated in multidistrict litigation are used to try to
efficiently and fairly settle large numbers of similarly situated
claims. But, defendants like GM are increasingly creating private
mechanisms for settling such claims outside the court system.
These mechanisms can be similar to other funds designed
to compensate injured people, such as the funds created to
compensate people who were injured on 9/11 or in the Boston
Marathon bombing. One important difference, however, is that
funds like GM’s are created and financed by the entity that is
alleged to have caused the harm.
The rise of such private claims resolution in mass cases raises
many interesting questions for psychologists. Finding ways to
deal with mass litigation raises a tension between resolving
large numbers of cases efficiently and providing individualized
justice to claimants. Psychological research on procedural
justice demonstrates the importance to claimants of processes
that provide opportunities for voice, neutral and trustworthy
decision-making, and dignified and respectful treatment. But
little research has explored the extent to which participants
experience procedural justice in corporate claims processes,
whether there are features of these processes that enhance or
detract from procedural justice, the motives and decision-making of potential claimants in such processes, or how such
facilities affect public perceptions of the companies involved or
their effectiveness in terms of trust repair.
The GM case also raises interesting questions about how
decisions are made within corporations; how people with
different backgrounds and roles think about cost-benefit
analysis and other tradeoffs; the complex relationships among
apologizing, taking responsibility and setting boundaries on
liability; and the nonmonetary effects of decisions to award
compensation (for example, addressing the responsibility that
many drivers — some of whom faced criminal changes — felt
for having caused the accidents). n
“Judicial Notebook” is a project of APA Div. 9 (Society for the
Psychological Study of Social Issues).
General Motors, ignition
switches and claims resolution
By Jennifer K. Robbennolt, JD, PhD, University of Illinois
Little research has explored the
extent to which participants
experience procedural justice in
corporate claims processes.