Through Bankruptcy Deal, Chrysler Gets Protection in Lawsuits

Car accidents are not always the fault of a negligent driver. Often they are, and in those cases personal injury lawsuits as well as criminal charges will ensue. But there are those incidents that are caused every now and then due to a manufacturer’s mistake.

Product liability lawsuits aim to get compensation for victims who have suffered due to a defective product that should have been kept from the public. The past proves that auto defects often lead to fatal accidents or injury among consumers.

The Toyota recall is a big, recent example of design and lack of safety updates leading to danger on the roads. The Wall Street Journal outlines dangers related to Chrysler vehicles and how victims of car accidents involving Chryslers might have a hard time getting the complete justice that they believe they deserve in a personal injury or wrongful death lawsuit.

Like other auto companies, Chrysler ran into financial trouble in this economic downturn. In 2009, the company went through restructuring after bankruptcy. Within that bankruptcy agreement was a stipulation that would save the company some money while limiting the scope of personal injury suits filed against it.

The WSJ reports that “Chrysler is immune from new punitive-damage claims from any alleged manufacturing defects in vehicles sold before the auto maker’s 2009 government-brokered restructuring.” Notice how “punitive-damage claims” are specified in the rule. That’s important to note in order for potential victims to know that they are not completely prohibited from seeking any damages following an accident they think was the result of Chrysler’s negligence.

The next post will delve deeper into the matter of punitive damages versus other types of damages and also give examples of personal injury cases that have been affected by the company’s bankruptcy setup.

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