Personal Injury Law

Automakers in bankruptcy dodging personal injury lawsuits

By Ryan Bradley, Esq.

A disturbing side effect of the bankruptcy filings of General Motors and Chrysler is popping up across the country as well as here in Missouri. As part of their bankruptcy proceedings, both automakers will be able to dodge liability for all pending personal injury lawsuits relating to vehicles produced prior to the bankruptcy.

Reports are popping up all over the country of people?s lawsuits being essentially canceled as a result of this legal loophole. Most of these people have suffered a serious personal injury caused by any number of product defects such as tire failure, seat belt failure, unexpected fire, and airbag malfunctions.

These types of personal injury suits fall under the broader category of product liability.

Fox News 4 in Kansas City recently reported on one of these cases here in Missouri. According to a Fox 4 report, Don Wren of Liberty, Missouri had his personal injury lawsuit suspended only days before it was set to be heard in trial. Wren lost his leg in a 2004 Missouri car crash while riding in his 1994 Oldsmobile Cutlass. His lawsuit claimed that his car lacked frame rails to absorb head-on crashes, a safety feature that was standard on every Cutlass prior to and after 1994.

For the thousands of people in Wren?s position, there is little in the way of a backup plan. They will become unsecured creditors, which means GM or Chrysler will be able to pay out other larger bank debts first before even addressing the people on hold with lawsuits. Even then, the unsecured creditors will be taken care of in order of the size of their claim and will get only the bare minimum in return which may be too little, too late for people in extreme situations like Wren.

The other negative side effect, aside from thousands of innocent victims not getting their day in court, is that it provides no incentive for the automaker to recall defective cars and may actually lead to more personal injuries. Product recalls are issued by companies in response to the number of accident claims. Without these claims, the statistics won?t back up the need for a safety recall and thousands of potentially dangerous vehicles will remain on the roadways.

These large automakers are being let off the hook in a big way and those victims with serious injuries are the ones paying for it.

Full post as published by Missouri Accident Lawyer Blog on July 14, 2009 (boomark / email).