Chrysler’s bankruptcy setup limits injury victims’ legal options

In our previous post we began a discussion about Chrysler and how its bankruptcy amid the economic downturn uniquely affects potential product liability victims’ choices when suing. If you or someone you know is injured due to a defective auto made by Chrysler that you bought before its bankruptcy restructuring plan was approved in 2009, then seeking punitive damages is off of the table.

But maybe you don’t know what punitive damages means. There is more than one type of damages that injury or wrongful death plaintiffs can seek in a civil suit. Essentially, there are punitive damages as well as compensatory damages. A supposed victim of Chrysler’s negligence still has the option to sue for compensatory damages.

Compensatory damages are basically means to pay a victim back for finances lost as a result of the negligence at the center of a civil suit. They can include past and future medical bills, money lost due to missed work and money lost due to damaged property. Punitive damages don’t fit into that picture.

Punitive damages are basically added on top of compensatory damages in cases when the court wants to send a stronger message to a defendant who is found liable for an injury or death. A negligent company, for example, could be required to pay plaintiffs more money in punitive damages simply as an extra punishment. The money isn’t assigned to any loss in particular.

A father who was injured along with his two children when the family’s Chrysler van caught on fire was unable to seek those punitive damages when he sued the car maker. You can imagine how that might be frustrating. No amount in damages ever feels sufficient when the lives of someone’s children were put at risk.

The special immunity that Chrysler has essentially limits the extent of justice that plaintiffs can seek and achieve. But that doesn’t mean that they can’t sue at all. Too often, victims are scared of pursuing lawsuits against big companies. But going after those entities when they’ve been negligent is extremely important, not only for a particular plaintiff’s peace of mind but for the overall safety of all consumers.

Source: The Wall Street Journal, “Chrysler Got Legal Shield in Chapter 11,” Mike Spector, April 4, 2012



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