In late March, the United States Senate approved legislation that would increase the fines levied against U.S. automakers who failed to comply with automobile recall regulations. Currently, automakers are fined a maximum Current (2008) logo for the United States Nati...of $17 million but the proposed legislation would greatly increase the maximum fines to $250 million.

As explained in a Detroit News article, the rationale behind the proposed increase is to encourage recall regulation compliance on behalf of automakers:

National Highway Traffic Safety Adminstrator David Strickland told a House panel on Thursday that higher fines would help deter automakers.

Strickland said the $17 million maximum fine is a “pittance to most of these automakers” because of their large size.

Not surprisingly, automakers opposed the change alleging that the current fine structure was more than sufficient and higher fines would do little to change the rates of compliance.

But consumer advocacy groups disagreed, contending that public safety should be the primary concern and higher fines would ultimately serve the greater good:

But Ami V. Gadhia, senior policy council at Consumers Union, said the fines make sense, saying they “will help act as a deterrent against future violations that imperil public safety. While the $250 million figure is the outermost limit of what NHTSA could fine a company for a series of violations, this cap can help ensure that violations do not become a ‘cost of doing business’ for a large, multibillion dollar company.”

This argument simply makes sense. After all, if automakers comply with the regulations, the higher fines won’t even be an issue. Not to mention that the higher fines simply encourage automakers to place public safety and the prevention of automobile accidents ahead of their business concerns–and public safety should always trump business profits. Complying with recall rules is the ethical thing to do–and for companies subject to the potentially increased fines–it will undoubtedly be the best business decision as well.

The Ankin Law Office LLC (www.ankinlaw.com) handles workers’ compensation and personal injury cases. You can reach the firm by calling (312) 346-8780.

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