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).
“Judicial Notebook” is a project of APA Div. 9 (Society for the Psychological Study of Social Issues).
