Ford recently announced that it has reached an important settlement with the National Highway Traffic Safety Administration, the main auto safety regulatory agency in the U.S. The settlement resulted in Ford agreeing to pay the maximum fine of $17.35 million to end the dispute surrounding how long the car company took to notify customers of a dangerous and ultimately deadly defect. The fine represents the largest amount ever paid by a car company under existing auto safety laws.
In August of 2012, Ford announced that it would recall 423,000 vehicles in the U.S. that were manufactured between 2001 and 2004. The recall concerned Escape models, the company’s compact SUV. Ford announced at the time that the reason for the recall was a defect in the Escape’s design that could cause the accelerator to become stuck in the down position even after a driver had lifted his or her foot off the gas.
Though the decision to recall a defective product is a good one, the problem, according to officials with the NHTSA, is that there is evidence that Ford may have known about safety issues with the Escape earlier and did not warn the public or the government. This failure to reveal safety issues is a federal offense and placed Ford in jeopardy of serious civil or even criminal penalties.
Regulatory officials with the NHTSA believe the recall was “untimely” and could have resulted in an enforcement action against the company for its lengthy delay in announcing the recall to the unsuspecting public. Though Ford decided to settle the case, the car company refused to admit fault, an important legal ploy to try and minimize any liability associated with the recall.
The settlement documents also discuss the Escape’s automotive cousin, the Mazda Tribute, which is made on the same platform. Mazda followed Ford’s lead last year and announced a similar recall of 217,000 Tributes made between 2001 and 2006. So far no announcement concerning a settlement with Mazda has been forthcoming, though industry experts say they expect similar negotiations between Mazda and the NHTSA are ongoing.
The director of the Center for Auto Safety, Clarence Ditlow, has discussed the settlement, saying that the NHTSA may not have gone far enough to punish Ford. Ditlow says that if any company was ever deserving of such a huge fine it was Ford. Ditlow says that Ford had evidence of the accelerator trouble as early as 2005, yet the company utterly failed to take action and issue a recall on the Escape. The Center for Auto Safety says investigators need to find out just how many lives were lost in the interim period thanks to Ford’s delay. At the time of the recall, the NHTSA said it had 68 complaints about the Escape acceleration problem, including 13 crashes, nine injuries and one death.
If you or someone you know have been injured by a defective product and you would like to discuss your case with an attorney, please contact the Georgia product liability litigation attorneys at Pope McGlamry P.C. today to schedule a free consultation.
Source: “Ford Settles With U.S. for Delayed Recall,” by Mike Ramsey, published at WSJ.com.
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