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Fines hit automakers for inadequate defect reporting

Colorado motorists can expect stronger enforcement of the Transportation Recall Enhancement, Accountability and Documentation Act among car manufacturers. Record fines against automakers imposed by the National Highway Traffic Safety Administration act as a warning against manufacturers with lax reporting practices.

The $70 million in penalties imposed on Honda Motor Co. follows a $35 million fine of General Motors less than a year earlier. Honda agreed to pay the large NHTSA fines and submit to continued monitoring of its reports of injuries and deaths potentially associated with defective vehicle systems.

A worldwide investigation into ongoing airbag failures and other automobile design defects revealed that Honda had violated reporting regulations for 11 years. In addition to failing to report 1,729 death and injury claims, Honda did not inform the NHTSA of warranty claims and repairs. Reporting requirements aid the NHTSA as it tries to identify potential safety hazards caused by defective auto parts.

With a Congressional cap of $35 million on penalties per violation, Honda received the maximum fine for failing to report all injuries and deaths. Then, another maximum $35 million fine hit the company for failing to fully report warranty repair claims.

As high profile cases like the investigation of Honda show, regulatory agencies play a role in exposing the extent of automotive design defects. Records of injuries and deaths may be needed to identify the liability of manufacturers. For example, a person injured because of a vehicle design flaw may be able to be compensated for damages by the automaker. Manufacturers typically bear responsibility for the consumer safety of their products. An injured person sometimes turns to an attorney for support when seeking damages from an automaker.

Source: Automotive News, "Honda agrees to pay $70 million in U.S. fines for under-reporting death, injury claims," Jeff Plungis, Jan. 8, 2015

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