January 27, 2016 / 11:21 PM / in 2 years

U.S. judge asked to halt GM ignition-switch settlement

NEW YORK (Reuters) - A U.S. judge was asked on Wednesday to rescind approval for a settlement fund to resolve 1,380 lawsuits claiming that an ignition switch in General Motors vehicles caused injuries or deaths, after an attorney said it did not benefit all plaintiffs.

The GM logo is seen at the General Motors Lansing Grand River Assembly Plant in Lansing, Michigan October 26, 2015. Photo taken October 26. REUTERS/Rebecca Cook

The filing from Lance Cooper, a Georgia attorney who first brought the switch defect to light, said one of the lawyers leading federal litigation over the defective switch, Robert Hilliard, engaged in a “private and secretive settlement process” that mostly benefited Hilliard and his own clients.

Further, Cooper said, he believed Hilliard may have reached a deal with GM to structure a series of bellwether, or test, trials to limit financial liability for the automaker, which recalled 2.6 million vehicles with the defective part in 2014.

A spokesman for GM declined to comment. Hilliard could not immediately be reached for comment Wednesday evening.

Nearly 400 injuries and deaths have been linked to the switch, which could shut off a vehicle engine during driving and prevent airbags from inflating. The fault had been known to GM for at least a decade prior to the recall.

Hilliard is one of three attorneys tapped to lead consolidated litigation over the switch, which involves claims for injuries, deaths and lost vehicle value. In September, GM announced it would record a $575 million charge for civil settlements over the switch, including 1,380 injury and death lawsuits as well as shareholder litigation. It also paid $900 million to end a criminal probe into the switch problems.

U.S. District Judge Jesse Furman in Manhattan, who oversees the consolidated federal litigation, signed off in December on an order approving the establishment of a settlement fund for the civil injury and death cases.

Cooper’s filing said Furman should reconsider. Hilliard made no effort to include plaintiffs he did not represent in the settlement, nor their attorneys, Cooper alleged. As a result, it is now more difficult for the remaining plaintiffs to receive compensation from GM, the filing said.

On Monday, Cooper asked Furman to remove Hilliard and two other lawyers from leadership positions in the litigation, saying they had mismanaged the cases, including a first trial that was abruptly dismissed after the plaintiff was accused of making misleading statements.

Hilliard and his co-counsel have denied Cooper’s accusations. Cooper represented the family of Brooke Melton, whose 2010 death in a car crash led to a lawsuit that first revealed problems with the part.

Reporting by Jessica Dye; Editing by Alexia Garamfalvi and Andrew Hay

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