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A glimpse into the process of deciding claims in GM crisis

A team in Washington led by (from right) Kenneth Feinberg and Camille Biros conferred last month on claims from accidents involving defective General Motors ignition switches.
A team in Washington led by (from right) Kenneth Feinberg and Camille Biros conferred last month on claims from accidents involving defective General Motors ignition switches.Drew Angerer/The New York Times/NYT

WASHINGTON — If this Monday is like almost every other one this fall, the acknowledged death toll from General Motors’ defective ignition switch will rise.

Inside a hushed suite of law offices here, 500 miles away from the automaker’s Detroit headquarters, the victim-compensation team led by Kenneth R. Feinberg will post its weekly update of the number of death and injury claims it has found to be eligible for payment by GM.

The company is Feinberg’s client, paying him for his work, and weighing in behind the scenes on dozens of cases. But Feinberg has already identified well more than twice as many deaths from the defective switch than the company did — 32 instead of 13 — and is on pace to pinpoint many more.

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It is an unusual process, intended to show the company living up to its “civic duty” to help victims, as its chief executive, Mary T. Barra, has put it, while also sparing the automaker long and costly court cases.

But in giving Feinberg sole discretion to determine who the victims are and how much money they should receive, GM could end up paying more money to more people than the courts would have allowed.

The review process is confidential, but recently, Feinberg and his deputy, Camille Biros, agreed to provide The New York Times with a glimpse of how they evaluate claims. They answered questions, allowed a reporter into the windowless conference room of Feinberg’s law offices where they make the final decisions, and showed a handful of claims with names and additional details concealed to protect identities.

GM declined to make anyone available for interviews but agreed to answer questions about the process in writing.

The program stipulates that the company cannot overrule Feinberg but it is entitled to be heard. Interviews show that during the review stages over the last three months, GM has participated in conference calls with Feinberg’s team, submitted documents, and presented findings by its own engineers in certain cases.

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But rarely, Feinberg and GM say, has the automaker’s feedback changed his mind.

“Ken Feinberg ultimately decides who is eligible, and we support his determinations,” GM said.

Feinberg said the company has never questioned the amount of an award, many of which are in the millions of dollars. “It has nothing to do with dollars,” he said. “GM’s focus is exclusively eligibility.”

His last experience developing a victim compensation plan for a corporate client — BP after the 2010 Gulf of Mexico oil spill — was difficult. The company complained that he was awarding too much money to too many businesses claiming economic losses, even as business owners and plaintiffs’ lawyers said he was too slow and not generous enough.

No such public uproar has surrounded the GM effort. But GM keeps close tabs on the claims coming to Feinberg. Every name and vehicle identification number are submitted to the company as they arrive.

The faulty ignition switch was found to cause a moving car to suddenly turn off, making it difficult to control and deactivating the air bag system. Of the 2,036 accident claims filed with the compensation program as of last week, 1,095 had been submitted with no documentation — just names, vehicle identification numbers, and basic information.

GM has “asked to talk to us” about 72 cases, Biros said. “They give us whatever information they want us to hear.”

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Feinberg has a reputation as the country’s most renowned victim compensation expert — a man called on to administer programs in the wake of the Virginia Tech shootings and the World Trade Center attacks, and oversee One Fund Boston, formed to aid victims of the Boston Marathon bombings.

That has been valuable to GM’s effort to restore public trust as it faces multiple investigations and lawsuits over its long delay in addressing the safety issue and recalling the cars with the defective switch.

But his determinations have wrested control of the death count from the company, and have effectively become the official record of the human toll. GM has been rendered a bystander as, week after week, the number of death claims accepted by the program edges up.

The automaker has made its first payments to families under the program, though it has not publicly announced it.

Biros said the discussion with the company usually takes place during a conference call involving engineers who are familiar with the cases and other employees. One may be a lawyer, she said, but usually the engineers dominate.

Often, documents are submitted, including correspondence from customer service files or records from reviews of claims filed against the company. Sometimes, the engineers provide their own analysis of so-called black box data or circumstances of the crash.

The program never announces when it makes payment offers or how much those offers are. But when asked, Feinberg and Biros said they had made 40 official offers. Twenty-eight families have accepted, thus waiving their right to sue GM. No one has declined. GM has sent checks to 15 families, a spokesman said.

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Feinberg’s formula for compensation in deaths starts at $1 million and can run into several million dollars, after adding a lifetime’s projected lost earnings and $300,000 each for surviving dependents and spouse.

Neither Feinberg nor GM has disclosed what his firm is being paid. His work on the funds for the Boston Marathon, 9/11, and other noncorporate clients was done for the public good without charge.