Ford Explorer Settlement Pays Lawyers

The rich get rich and the poor get certificates. 

Consumers who owned 1999-01 Ford Explorers and charged that their SUV’s resale value dropped like a rock after the exploding-tire-rollover fiasco have finally gotten (a kind of) financial justice.

A California judge has approved a settlement of a class action lawsuit filed more then 2 years ago on behalf of 800,000 Explorer owners in California, Illinois, Texas and Connecticut.

Each will now be sent a certificate worth $500 — toward the purchase of a new Explorer.

If those unhappy with their 1999-2001 Explorers balk at buying a new one, they instead will be awarded a certificate worth $300 toward the purchase of any other new Ford, Mercury or Lincoln vehicle.

They must act fast. The certificates are only valid for the next 12 months. Use 'em or loose 'em.

While consumers who claim to have suffered financially will be given $300 to $500 certificates to atone for their lost equity, the lawyers who represented them in the class action suit will divvy up $25 million in fees for forcing Ford to print those coupons.

The lawyers won't get coupons offering discounts on the purchase of a new Explorer or any Ford product, however.

Ford spokeswoman Kristen Kinley said the settlement ends all non-injury Explorer claims against Ford resulting from charges that the failed tires led vehicles to roll over.

Comments

[LM]

What a lame settlement. I think gas prices, though, are causing the value of those Explorer to drop like a rock more than anything. At least they got something!

Too bad its for another Ford.

[andrew]

my last domestic car I've purchased was in 1979 sold in 1982 and no more problems since

[John Bisnar]

So, really, who benefits from this class action lawsuit settlement? Maybe the attorneys, definitely Ford – but what about the consumers? Let’s look a little closer. How does a measly $500 or $300 discount toward another Ford vehicle compensate consumer, punish the manufacturer and prevent unsafe products from entering the American market place?

Pedro Morillas of the California Public Interest Research Group (www.calpirg.org) is quoted in a Sacramento Bee article as saying,” Five hundred million dollars does sound like a lot of money, but Ford may have gotten a better deal than they deserved.”

In some respects I agree with Morillas. If the case had not settled and the plaintiffs won, Ford, according to its lawyers, would be in bankruptcy. It may not have been able to pay the judgment. It that sense Ford may have gotten a better deal than they deserve.

This lawsuit should’ve aimed to make sure that Ford was punished for producing defective vehicles and ensure that no auto manufacturer in the future would dare market an unsafe product to the American public. To take it further, it should been a warning to every manufacturer that pushing any unsafe product into the American market place will not be tolerated and the manufacturer will be held accountable.

This lawsuit hurt Ford. It has cost them millions in attorneys’ fees. It will cost them hundreds of millions to settle. More importantly it has cost them billions in brand recognition. The perception that Ford SUVs are safe has rolled over and been crushed by the exposure of their knowing disregard for consumer safety.

Ford has spent millions, maybe billions, building its image of making safe vehicles. We now know better. How much damage has been done to Ford’s reputation? How much damage will it do to their future sales? That’s where Ford is going to pay the real price.

Every smart manufacturer who sells products in the United States is looking at this lawsuit and vowing not to make the same mistake. That is where we as consumers benefited from this lawsuit. For decades to come, products sold in America are going to be safer because of this class action lawsuit.

I applaud the attorneys who had the guts, commitment to consumers and foresight to pursue this monumental class action lawsuit. They provided a great service to us all. As consumers we benefit from attorneys who pursue class action lawsuits on our behalf.

It is true that the actual class participants, the consumers who are involved, get very little personal monetary benefit from the class action lawsuit. However, these types of class action lawsuits are designed to keep negligent and fraudulent corporations in check, to hold them accountable for their actions and to make our market place safe for all of us. It was not designed to make the class members rich.

Various federal agencies have been aware of the problems with Ford’s SUVs for years. You didn’t see any governmental agency taking on Ford on behalf of consumers. You didn’t see our government consumer protection agencies holding Ford accountable or preventing their unsafe vehicles coming into the market.

Some will say that it made the attorneys rich. It appears that the attorneys are getting a sizeable fee and I’d love to be one of them. However, I know how much work and expense my firm goes through to do a few dozen cases against Ford. There is no way we could afford to risk the tens of millions of dollars and tens of thousands of hours of work time to pursue such a class action lawsuit. If we could come up with the money and man power in the first place, we’d be bankrupt if we lost.

Bottom line, our system of justice worked. The wrongdoer is being held accountable. The harmed are getting some compensation. And America is a safer place for it.

Hooray for our system of justice!