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Attorneys prepare lawsuits against GM over handling of ignition switch recall

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General Motors CEO Mary Barra addresses employees at the automaker's vehicle engineering center in Warren, Mich., Thursday, June 5, 2014. Barra said 15 employees have been fired and five others have been disciplined over the company's failure to disclose a defect with ignition switches that is now linked to at least 13 deaths. (AP Photo/Carlos Osorio)

Of all the problems haunting General Motors Co. over its handling of defective ignition switches, the one with plaintiffs' lawyers is just beginning.

The company's size and self-confessed failures in an internal report released last week are attracting lawyers who forged some of the biggest civil settlements ever, from the landmark tobacco litigation to the Exxon Valdez disaster to Toyota Motor Corp.'s unintended-acceleration problems.

More than 80 ignition-switch-related civil lawsuits have been filed against GM, most seeking alleged economic damages, such as repair costs and declines in resale value on about 2.6 million cars recalled since February. The average depreciation claim alone might total $500 to $1,000 per car, according to lawyers who have filed suits against GM.

The company also will have to fight suits claiming the defective ignition switches caused serious injuries and deaths. While just a handful of cases are under way, plaintiffs' lawyer Bob Hilliard of Corpus Christi, Texas, said he has signed up several hundred such clients. GM has attributed at least 54 crashes and 13 deaths to switch-related air bag failures, and said last week that it can't rule out the possibility that the death toll could climb.

Chief Executive Mary Barra said Thursday that she wouldn't "speculate on anything involving litigation." She said the company would "do the right thing by victims." Company spokesman Greg Martin said the CEO's "remarks last week regarding the Valukas report stand on their own," declining further comment. GM also is being scrutinized by regulators, prosecutors and lawmakers.

It is common for bad headlines and deep pockets to lure plaintiffs' lawyers—and a pile of lawsuits. In 2012, BP PLC agreed to pay at least $7.8 billion to end litigation over the Deepwater Horizon oil spill. Toyota settled for about $1.1 billion with owners of about 16 million cars affected by unintended-acceleration problems. Plaintiffs' lawyers collected about $227 million in fees and costs.

Some legal experts said GM could face an unusually long, steep and costly fight in the wake of the 315-page, company-funded report by former U.S. Attorney Anton Valukas. "This is a big case, and it could be enormously expensive for GM," said Elizabeth Burch, a University of Georgia law professor.

Ms. Barra said the report demonstrated a "pattern of incompetence and neglect" in the auto maker's 11-year failure to recall cars equipped with a defective ignition switch. Mr. Valukas said the company's "search for root cause became a basis for doing nothing to resolve the problem for years."

One section of the report detailed an outside law firm's concerns about the company's legal exposure. In 2010, King & Spalding LLP advised GM to settle a wrongful-death suit filed in Tennessee, concluding that a "seven-figure verdict remains probable" even though "Nashville area jurisdictions are not 'judicial hellholes.' "

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