It’s not uncommon for civil litigation to be resolved through settlement prior to trial. Typically, this is advantageous for both parties for a myriad of reasons, though it can sometimes come with one catch: confidentiality.

In exchange for keeping the details of the agreement private, plaintiffs may receive a damages award. Businesses typically have a vested interest in keeping such information under wraps. In particular, companies benefit when future plaintiffs with the same or similar claims may not access details that could be relevant to their own case, details that would be public had the case gone to trial or the settlement not been confidential.

Such is the case currently with regard to the first of what will likely be scores of product liability lawsuits against Takata Corp., the Japanese-based airbag manufacturer whose defective vehicle parts have reportedly contributed to numerous injuries and several deaths. The airbags reportedly deploy with such force that the metal contained inside becomes shrapnel in the event of impact.

Our product liability attorneys note these secret deals happened swiftly, often before the vehicle manufacturers began issuing recalls on the parts. In a fair number of instances, the settlements were reached even before the plaintiffs’ attorneys had a chance to engage in discovery.

Discovery is a process whereby both sides are compelled to produce certain requested evidence, at the discretion of the court. Since the information culled during the discovery process is public, this is information that would benefit future plaintiffs. Of course, companies are working to make certain that doesn’t happen.

Of the dozen lawsuits so far filed in response to injuries caused by the exploding airbags, five were settled before the discovery phase. A sixth case is being reviewed for settlement, and another is in mediation. One case was dropped, but thus far none have gone to trial. This is likely not a coincidence.

This has resulted in a general lack of information as the situation escalates and Takata itself refuses to issue its own recall despite growing pressure from the National Highway Traffic Safety Administration. As of now, some 10 car manufacturers have initiated a recall of seven million vehicles. In many cases, replacement airbags are not yet available, leaving many drivers and passengers still vulnerable and at risk. This is particularly true in warmer states like Florida, since humidity is believed to be a trigger to the malfunction.

A federal grand jury has issued a subpoena to Takata, demanding documents and explanations with regard to the malfunctions, but the company has yet to respond.

Safety officials speculate the problem has to do with the degradation of chemical propellant inside the part, which deteriorates over time due to moisture or production issues.

Said one attorney who represented a plaintiff in the recently settled lawsuit, “It almost seemed like they were going to pay us off to shut us up.” He indicated Takata was interested in settling the case immediately.

In other cases, people have reached settlement agreements before even filing a lawsuit. For example, Bloomberg reported on a confidential settlement agreement reached by a Florida man who suffered an airbag shrapnel leg injury just 10 months after the crash, despite never filing a lawsuit.

It’s imperative for those affected by defective vehicle parts, whether they are dangerous airbags, faulty ignition switches, or a myriad of other problems that prompt hundreds of recalls annually, to contact an experienced product liability attorney as soon as possible to discuss potential remedies.

More Blog Entries:
Payne v. Novartis Pharm. Corp. – Failure-to-Warn Claim Will Proceed, Sept. 2, 2014, Product Liability Lawyer Blog