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"Race to the Courthouse": Lawyers Circling General Motors Recall

/ Source: Reuters
Lawyers are circling looking for clients following the massive GM recall
Lawyers are circling looking for clients following the massive GM recallAFP - Getty Images

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General Motors may face lawsuits for millions of dollars over its recall of 1.6 million cars, but first, lawyers have to find clients if they hope to get a foot in the courthouse door.

To do so they are buying Google search terms, registering Internet domain names, announcing investigations into GM's behavior, and turning to their Twitter and Facebook accounts to provide updates on the recall.

"This is a race to the courthouse," said Bryan Quigley, a senior vice president at the Institute for Legal Reform, an arm of the pro-business U.S. Chamber of Commerce.

Already at least two lawsuits have been filed, claiming the company concealed its knowledge of ignition problems from the public.

Law firms that represent plaintiffs, unlike corporate lawyers and litigators, typically receive a percentage of the money their clients recover. The firms that attract the greatest number with successful claims gain the most.

Take a recent class action against Toyota. Millions of plaintiffs said they suffered economic losses after the company recalled millions of vehicles for sudden acceleration problems. The lawyers took home $200 million in fees and $27 million in expenses in a settlement valued at $1.6 billion that was approved by a federal judge last year.

GM recalled 1.6 million cars last month because a faulty ignition switch was able to turn off a car's engine, disable its airbags and make steering difficult. The problem has been linked to 12 deaths, the company says. The recall has led to government criminal and civil investigations, an internal probe by GM and preparations for hearings by Congress.

- Reuters

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