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Chrysler Bankruptcy Derails Injury Lawsuits

Thousands Injured By Faulty Car Parts Can't Sue

POSTED: Friday, June 5, 2009
UPDATED: 10:38 am CDT June 5, 2009

Thousands of people injured by faulty car parts are about to lose their right to sue.

That's because the fine print in Chrysler's bankruptcy plan is poised to let the car maker off the hook, reported WCVB-TV in Boston.

An aspiring model, Donia Kerrigan, of Scarborough, Maine, is just learning she won't have the right to sue Chrysler. Her left arm was amputated in a crash. She claims a defective seat belt and air bag in her Jeep are to blame.

Each year Chrysler pays about $250 million to settle lawsuits brought by accident victims -- like the owners of Jeeps that suddenly went into reverse after being put into park. But in the bankruptcy deal fast tracked by the Obama Administration, the victims are considered unsecured creditors, receiving no special treatment.

"(They are) the most vulnerable group that really needs help and they are being (crossed) out of this completely," product safety expert Sean Kane said.

In Washington, victims and consumer groups expressed their outrage. Jeremy Warner's two legs were burned off when an allegedly defective plastic brake fluid container on his Jeep Wrangler caught fire.

"I had a pending personal injury product liability law suit against Chrysler that, due to the way the bankruptcy plan was written, has been eliminated," he said.

The consequences are even more significant as General Motors -- a much larger company than Chrysler -- also goes into bankruptcy.

About 700 people a year file liability suits against Chrysler, claiming death or serious injury. A consumer group has filed an appeal.
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