Toyota Motor Corp. has agreed to a staggering settlement of up to $1.4 billion to resolve claims regarding problems with sudden and unintended acceleration of its vehicles. The billion dollar settlement would resolve lawsuits brought by owners who claim that the value of their vehicles plummeted as result of the unintended acceleration recalls. The lawsuits regarding injuries and deaths caused by the sudden and unintended acceleration defect remain pending, with the first trial set to begin in February.
According to this article, a plaintiff memo describes the settlement as “a landmark, if not a record, settlement in automobile defect class action litigation in the United States,” and “significant step forward” for the automaker.
Toyota’s image and reputation has a suffered a serious blow since the controversy surrounding the unintended acceleration problems first surfaced a few years ago. Since then, Toyota has faced a number of other significant setbacks, the most recent of which was a massive recall of 670,000 second generation Prius hybrids (those built from August 2003 through March 30, 2009) in the U.S. for potentially defective steering, along with about 350,000 of those same Priuses also recalled for water pumps that could cause the cars to stall. The two recalls were part of a larger global recall that encompasses almost 2.8 million vehicles.
According to Reuters, Toyota will take a one-time $1.1 billion pre-tax charge against earnings to cover the estimated costs of the settlement. Pursuant to the settlement agreement, Toyota will offer cash payments of about $250 million to eligible customers who sold their vehicles or turned in leased vehicles between September 2009 and December 2010 and it will launch a $250 million program for 16 million current owners to provide supplemental warranty coverage for certain vehicle components. Moreover, the auto manufacturer will establish driver education programs, fund new research into advanced safety technologies, and retrofit about 3.2 million vehicles with a brake override system, which is designed to ensure a car will stop when the brakes are applied even if the accelerator pedal is depressed.
Before it takes effect, the settlement must first be approved by a California federal judge, and Toyota will provide additional information about the settlement to current and former Toyota owners in the upcoming months.
If you have suffered injuries or damages as a result of a defective vehicle, you may also wish to consult with an attorney. The Chicago product liability law firm of Ankin Law Offices, LLC is dedicated to protecting consumers from dangerous and defective products, including defective vehicles. Contact one of our skilled Chicago personal injury and product liability attorneys at (312) 600-0000 if you would like more information on recalled vehicles.