After the Chrysler bankruptcy left consumers without recourse to the company for potential product defects, GM had originally sought a similar outcome for itself. But under pressure from the government and consumer groups, GM has now agreed to stand behind product liability claims for all GM cars and trucks that are filed after the company emerges from bankruptcy, according to court documents (PDF).

Left behind in the new agreement are consumers who have existing liability claims against GM that were pending before the automaker filed for bankruptcy. Many of these consumers have been left as the most vulnerable members of society as a result of car accidents or incidents allegedly caused by defects in GM vehicles. Among the 300-some claimants are quadriplegics and catastrophically injured children, says Sean Kane, CEO of Safety Research and Strategies of Rehoboth, Mass.

In GM’s initial bankruptcy filing, the company planned to abandon these claims.

Bankruptcy law is designed to allow companies to eliminate debt, paying off little or none of it. In most cases, however, these debts are to investors and banks that loaned the companies money. There have been few other cases in which consumers who have suffered catastrophic injuries are listed among the company’s creditors and may be left with little or no recourse to compensation for their claims.

The new agreement was reportedly reached in conjunction with the Obama administration’s Autos Task Force to expedite the company emerging from bankruptcy. It is part of a revised purchase and sale agreement which also deals the claims of other creditors. GM is now expected to emerge from bankruptcy in a matter of days. Hearings begin today to begin approving the sale of GM’s “good assets” to the new company.

Consumer advocacy and safety organizations are lobbying to have consumers with existing product-defect claims against GM covered by the new GM. Safety Research and Strategies estimates that 35 percent of all death and injury claims reported to the National Highway Traffic Safety Administration involve GM cars and trucks.

Meanwhile, a bill, called the “Jeremy Warriner Consumer Protection Act of 2009,” has been introduced in the House of Representatives that would require GM and Chrysler to carry insurance that would cover accident victims who win judgments against the companies. Warriner is a paraplegic who lost his legs in a fire when he was pinned in his Jeep Wrangler after a side collision. If passed into law, this could help people with pending claims.

—Eric Evarts