The law entitles people having suffered injuries from others’ negligence to seek redressal for their losses. In cases of personal injuries, plaintiffs can claim medical costs and any incomes that they might have lost due to the injuries under compensatory damages. In many cases, claimants also ask for, and the courts may award punitive damages. These are granted to punish the perpetrators for acting negligently and deter similar behavior in the future. While only a few of such cases see the light of trial in courtrooms, making most of them end up in a mutual settlement.
These settlements may also be made between public authorities and the party at fault without the inclusion of an individual complainant who may have suffered an injury. In the latest line of claims made by public authorities against private entities, the Arizona state’s recovery of settlement from Honda remains the most highlighted. According to the state’s attorney general Mark Brnovich, American Honda Motor Company Inc. has agreed to pay $5 million in the settlement over allegations that the company had failed to disclose defects in its airbags.
The Accident & Investigations
The matter erupted after an accident involving a 2002 Honda Civic took place in the Phoenix suburb of Mesa, leaving one person dead. Following the accident, investigations were probed into the incident by the US National Highway Traffic Safety Administration with assistance from Honda. Reports from this investigation revealed that the fault existed in the airbags, having ruptured inflators in the driver’s side and passenger airbags.
The Takata Airbags
The airbags were manufactured by Takata Group, which supplies its products to Honda and Acura. As per estimation, around 40,000 cars with these possibly faulty airbags are currently on the roads. The Arizona state authorities have dispatched communications requesting people with these cars to get their airbags checked and repaired in the wake of the fault being revealed. There has been a prolonged background to the safety of Takata manufactured airbags, which had been used by major motor-vehicle manufacturers in the past. It was found that Takata had been using volatile ammonium nitrate to create a small explosion to inflate airbags in a crash. This formula, however, could not inflate airbags for much longer since the chemical had tendencies to deteriorate over time when reacting with the moisture in the air. The resulting explosion would be powerful enough to blow apart a metal canister and hurl shrapnel around the passenger compartment.
Investigations into Takata’s methods of manufacturing and its representations before auto manufacturers revealed shocking details. It was found that Takata had been deceiving its clientele comprising major automakers regarding the safety of its airbags. Subsequent action into these offenses led the court to declare Takata guilty in 2017 upon federal criminal fraud charges.
Takata’s airbags have sparked controversy previously, too, resulting in a number of deaths globally. Its inflators have killed at least 26 people, leaving more than 300 people injured behind the wheels. The company’s faulty products have been recalled several times and hold the record for the most extensive string of automotive recalls in US history. 50 million inflators were recalled in the US, only with about 100 million being recalled worldwide.
Honda’s Measures & Response
Resulting from this backdrop, Honda has not released any official statement commenting on the fault element or defending its side. However, it was clarified that the car destroyed in the unfortunate accident was recalled by the company in December 2011 for suspected issues in the driver’s side inflator. Subsequently, the vehicle was again called in for inspection in November 2014 for possible passenger-side airbag inflator problems. The automaker had also dispatched 15 notices to the car owners over the span of 8 years. Still, the car was never brought in for free repairs and maintenance. Concerned over the owner’s safety and to avoid any possible mishaps, the company even went at length to drop several phone calls to the current car owner. The owners’ registered address was also visited to leave recall information. However, the accident showed that the driver was not the registered owner of the car.
In the only official statement released by the company, Honda persists upon denial of any wrongdoing on its part, mentioning it to be one of the terms of the settlement. The statement further goes on to say the company’s massive replacement policies for Takata’s faulty goods, stating that 16 million defective Takata airbag inflators have been replaced yet. The company even emphasized its measures to get as many replacements as possible, highlighting that 294 million attempts have been made to contact owners individually and urge them to get their faulty airbag inflators replaced by the company.
The Other States vs. Honda
Some time ago, the automaker had entered into negotiations for a significant settlement to be paid to several states for faults uncovered in its cars. As per Arizona’s attorney general, the combined settlement comprised of a joint amount of $85 million that was to be paid out to multiple states. The state had declined to be a part of the joint receipt because the settlement amounts were to be kept exclusively by the states. This means that no portion of the payments could be used for customer restitution, as mentioned in the settlement terms. This could not be agreed upon by the state and was hence rejected.
Apart from paying the hefty $5 million bounties, the settlement agreement requires Honda to start a repair incentive program, to be effective and operational for six months. The company shall also provide payments to owners of the oldest Honda/Acura vehicles under recall and provide funding for public awareness and public service announcements to be carried out in Arizona. These public campaigns will be run to inform the masses about the urgency and risk posed by the defective Takata airbag inflators.