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Massive Recalls Due to Defective Takata Airbags Highlight the Dangers of Confidential Settlements in Product Liability Litigation


Posted by Brendan Faulkner of D'Amico & Pettinicchi, LLC on Oct 24, 2014 in Car Accidents

Airbag

 

The New York Times has reported that at least 3 deaths and 139 injuries have been associated with the defective Takata airbags that have led to the recalls of 14 million vehicles worldwide from 11 automakers. That is approximately 5 times the number of vehicles recalled this year by General Motors for its deadly ignition switch defect. (A complete list of affected vehicles is available here.)  The airbag safety crisis is yet another example of the significant "disconnect between what automakers are aware of internally and what they reveal publicly," as previously reported by the NY Times. It is also another gruesome reminder of the danger in allowing confidential settlements in product liability claims. With respect to the Takata airbags, the NY Times reported:

"The danger of exploding air bags was not disclosed for years after the first reported incident in 2004, despite red flags - including three additional ruptures reported to Honda in 2007, according to interviews, regulatory filings and court records. In each of the incidents, Honda settled confidential financial claims with people injured by the air bags, but the automaker did not issue a safety recall until late 2008, and then for only a small fraction - about 4,200 - of its vehicles eventually found to be equipped with the potentially explosive air bags. The delays by both Honda and Takata in alerting the public about the defect - and later in Takata's acknowledging it extended beyond a small group of Honda vehicles - meant other automakers like BMW, Toyota and Nissan were not aware of possible defects in their own vehicles for years, putting off their recalls."

There ought to be a law in Connecticut, like Florida's Sunshine in Litigation Act, that prohibits such confidential settlements.  When it comes to settlements involving dangerous products secrecy should be the rare exception.