Regulators fined Volvo automaker $1.5 million for delaying seven different recalls. A statement from the National Highway Traffic Safety Administration said that the settlement is meant to show car companies that everyone must obey the laws and address safety issues in a timely manner.
The recalls affected about 32,000 cars for a variety of dangerous and auto parts including defective airbags, stalling engines, and inaccurate tire-pressure labeling. These types of defects could have serious consequences for drivers or passengers in the vehicle and cause injuries or deaths in the event of a car accident.
Car companies have five days after the discovery of a safety problem to inform the NHTSA about their plan for a recall. If companies fail to do this, the NHTSA may fine them up to $17.35 million. Safety advocates say that this amount may not be enough to incentivize car companies to act responsibly, and there is new legislation in the works to try to increase the amount although the maximum is rarely invoked now.
People who are injured by defective auto parts may also pursue a personal injury claim against carmakers. Juries can award large sums for punitive damages in those cases which often act as a deterrent to negligent conduct in the future.
Volvo has not admitted any wrongdoing as a part of the settlement and maintains that they did act in a timely manner to effectuate a recall. However, the car company did say that they have reviewed processes for reacting to quality and safety issues.
Source: New York Times, "Government Fines Volvo $1.5 Million for Delaying Recall Reports," Christopher Jensen, July 3, 2012.