The Office of Inspector General (“OIG”) recently conducted an audit of the recall processes of the National Highway Traffic Safety Administration’s (“NHTSA”) Office of Defects Investigation (“ODI”) and found that NHTSA did not adequately manage light passenger vehicle recalls. The recall files lack documentation, do not ensure that remedies are reported in a complete and timely manner, and lack sufficient management controls to ensure staff assess risk when deciding on using oversight tools to improve recall completion rates. Further alarming to anyone working on automotive recall litigation matters, the OIG finds that NHTSA does not verify recall completion rates even though it has the authority to do so.

The audit findings prompted the OIG to provide recommendations to NHTSA in order to improve their monitoring and oversight processes. NHTSA concurred with three of the six recommendations.

It is concerning that NHTSA’s monitoring and oversight processes on light passenger vehicle safety recalls are lacking. In particular, NHTSA‘s lack of verification of recall completion rates is troubling since the estimated number of vehicles to be repaired is an important factor to consider in automotive recall litigation claims and may lead to economic damage computations that are out of line with economic reality. When facing an automotive recall litigation, the findings of the audit highlight that it is important to ensure that the completion rates proffered by automotive manufacturers be verified by a dispute resolution professional experienced in automotive recalls and not just take NHTSA’s or the OEM’s reported numbers as being accurate.

Interested in this topic? Read more in our November issue of Forefront.