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Chrysler Plan Could Prevent Lawsuits By Injured Persons

Posted By Regan Zambri & Long || 23-May-2009

If Chrysler’s bankruptcy is approved by Congress, owners of Chrysler, Jeep or Dodge vehicles may find themselves without the right to seek compensation for serious injuries caused by car defects.  The New York Times has recently published an interesting article concerning this hot topic

Under the proposed plan, Chrysler identified the obligations the new entity would assume and those it would leave behind. The proposed bankruptcy plan calls for the new Chrysler to honor existing new-car warranties. There is no promise, however, that it will be responsible for future product-liability suits brought by owners of vehicles sold before the automaker filed for bankruptcy.   

As the article states:  "[T]he Chrysler plan raises a question about why the new Chrysler, the successor to the old company, should be released from liability for product defects at the expense of consumers who may suffer future harm, said Norman I. Silber, a law professor at Hofstra University who specializes in consumer law.“Not only is there a moral claim to be made on behalf of consumers, but there is probably also a legal claim that it is not right,” Mr. Silber said. 

Concerned consumer groups, such as Public Citizen, the Center for Auto Safety, Consumer Action, Consumers for Auto Reliability and Safety and the National Association of Consumer Advocates have begun to lobby against the bankruptcy plan.  

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