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Former FBI Director Appointed to Oversee Takata Compensation Fund

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Back in August 2014, General Motors (GM) set up a compensation fund for those injured by its faulty ignition switches. Individuals who were driving a GM vehicle when the ignition switch turned off and who suffered injuries, as a result, were eligible to receive payouts from the company. An independent lawyer oversaw the claims and payouts. In the end, GM paid out nearly $600 million in total, approving 399 death and injury claims.

Now, it looks like Takata is following in GM’s tracks. As a part of their settlement with the Department of Justice (DOJ) over their defective airbags, the company agreed to pay $1 billion in criminal penalties for wire fraud and for falsifying test data on their airbags. To facilitate payouts to individual victims and to automakers, they are going to set up a compensation fund similar to the one GM used.

According to the New York Times, Judge George Caram Steeh of the Federal District Court in Detroit recently stated that he intended to appoint the former director of the Federal Bureau of Investigation (FBI), Robert S. Mueller III, to oversee the fund and administer the payments.

Takata Airbag Settlement

$125 Million Going to Victims of Takata Airbag Explosions

In the original DOJ settlement, the $1 billion included a $25 million fine, and $975 million in restitution. That restitution was to be broken into two parts: a) $125 million for individuals physically injured by the Takata airbags and b) $850 million for automakers who incurred costs to repair and replace the airbags.

Takata airbags may explode upon deployment, sending shrapnel into the interior of the vehicle that can cause life-threatening injuries. The fuel used inside the airbag inflator is believed to be the problem, as it can become unstable over time, particularly in warm and humid areas. So far, the airbags have been linked to 11 deaths and over 180 injuries in the U.S., and more injuries and deaths worldwide.

The DOJ stated that Takata “carried out a scheme to defraud its customers and auto manufacturers by providing false and manipulated airbag inflator test data that made the performance of the company’s airbag inflators appear better than it really was.” They went on to state that even after people started to get hurt and even killed by these airbags, the company still withheld information from their customers.

Going Forward for Defective Takata Airbag Victims

We don’t know yet what consumers will need to provide in order to qualify for payouts from the Takata compensation fund. Those details are in the works, along with the deadline for submitting claims. It is expected that parameters will be set in terms of the types of injuries that will be covered, the amount paid for each approved claim, and the type of proof required for a qualifying claim.

Consumers who accept payouts from this fund will no longer be eligible to file separate Takata airbag lawsuits against the company. Those who don’t accept payouts can still file individual cases if they so choose.

In addition to this compensation fund, Takata is also defending a number of lawsuits in consolidated proceedings in the Southern District of Florida and elsewhere.