GM could pay punitive damages in switch scandal trials 

General Motors may face larger penalties in trials related to the use of faulty ignition switches.

A bankruptcy judge on Monday ruled GM could be charged with punitive damages for knowledge it had about faulty switches.

Punitive damages can be far larger than damages for compensation because they are meant to punish, not just repay.

GM argued it should not face these charges because its 2009 bankruptcy erased those liabilities.

In 2014 the company began a recall of cars that had ignition switches which could turn off engines, disable power-assisted steering and brakes and prevent airbags working.

In Monday’s ruling Judge Robert Gerber wrote “Punitive damages may be sought against New GM to the extent – but only the extent – they are based on New GM knowledge or conduct alone.”

Bob Hilliard, attorney for the claimants, said he was pleased but not surprised by the ruling.

“New GM was pretending like Old GM is a stranger to them,” said Mr Hilliard.

The amount of punitive damages will be decided in individual cases brought by victims in post-2009 cases that have not agreed to settlements with GM.

The first trial is set for New York in January 2016.

Switch scandal

After initially denying the scandal, GM eventually recalled nearly 30 million cars that could have the defective switches.

In September GM reached a deal with the US government to pay $900m (£595m) to avoid criminal penalties, but admitted that individuals at the company knew about the problem.

When GM went through bankruptcy a new entity purchased the business, effectively creating a New GM made up of the same factories, employees and products. GM argued this process should also have cancelled out its financial liabilities in these accident cases.

Source: BBC – GM could pay punitive damages in switch scandal trials

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