A Canadian lawyer says the recent decision by a U.S. bankruptcy judge shields General Motors from lawsuits before its 2009 bankruptcy and potentially protects it from billions of dollars in claims related to defective ignition switches should have no bearing on the class-action suits in Canada.
Roch Dupont of Merchant Law Group, the firm handling the complicated Canadian class action against General Motors of Canada Ltd. (GMCL), notes that since GMCL did not technically go bankrupt here, the U.S. ruling plays no part moving forward.
“As far as we’re concerned, that doesn’t change the way we will proceed with our class action,” Dupont says.
U.S. bankruptcy Judge Robert Gerber ruled in mid-April that a liability shield listed as a condition of GM's exit from bankruptcy protection five years ago remains in place.
While reports suggest the automaker could still face claims related to loss of value in cars made before 2009, Gerber’s ruling means it will not have to fight dozens of lawsuits launched in American courts accusing it of concealing the switch defect that eventually resulted in the recall of millions of vehicles.
Merchant filed class actions in March 2014 related to the roughly 235,000 vehicles affected in Canada. The suit alleges affected units suffered from a design defect where the ignition switch would move from the on position to the off position while driving.
The firm maintains the defect resulted in a loss of a number of electrical systems including electrical power, power steering, brake assist and a loss of airbag function.
Dupont says suits have been filed in every province and case management judges have been appointed in Saskatchewan and B.C. Meetings to start litigation will likely start some time in May as they work towards setting dates and filing pre-trial motions.
He says case management judges are appointed to set rules for the class action. There is a pre-trial hearing called a common issues trial to determine if there is enough evidence to go to trial.
Suits were filed in every province to address different jurisdictional issues related to claimant involvement and because provincial courts generally won’t authorize a national class action ruling.
He didn’t provide a definitive number of claimants except to say that at last check there were a “couple thousand.”
Merchant is also representing 21 parties claiming the ignition switch issue resulted in a fatality.
Dupont would not comment on what financial liability for GM would look like since provincial courts will vary. He estimates that if every case were successful against GM in Canada, it could cost the automaker north of $20 million.
“But that’s a conservative estimate,” he adds.