Consumer Fraud

Toyota agrees to settle unintended acceleration lawsuits for $1.1 billion

toyota logo Toyota agrees to settle unintended acceleration lawsuits for $1.1 billionToyota Motor Corp. has agreed to pay $1.1 billion to settle class-action lawsuits related to sudden and unintentional acceleration in some of its vehicles. If approved, the settlement would be one of the largest in automotive history.

As part of the settlement, Toyota would make cash payments for economic loss on vehicles affected by multiple recalls and install special safety features on up to 3.2 million vehicles. The settlement does not cover claims of wrongful death and personal injury related to Toyota SUA. Those cases are scheduled to go to trial in February 2013.

The multi-district litigation was filed in 2010 after several consumers filed complaints that their Toyota vehicles accelerated suddenly and without warning, causing accidents, many of which resulted in injuries and fatalities. More than 8 million vehicles were recalled in the United States to correct floor mats that could become wedged under accelerator pedals or pedals that could stick with the throttle open.

Toyota has also been fined more than $60 million by the National Highway Traffic Safety Administration (NHTSA) for failing to release internal data about sudden acceleration in its vehicles. Previously, the automotive company placed the blame on drivers.

Under the settlement, Toyota has agreed to create a $250 million fund to pay claims of former owners of Toyota vehicles affected by the acceleration recalls. Toyota has also agreed to install a system that allow the brakes to override the accelerator to stop the automobile in the event floor mats get stuck in the pedals or the pedals get stuck. To date, about 250 million Toyota vehicles have received the override system, and an additional 550,000 still need the upgrade.

A customer support program will also be established for the current owners of 16 million Toyota vehicles, who will receive free repairs on certain parts for up to 10 years. The company will also contribute an additional $30 million to fund automotive safety research with emphasis on driver behavior and unintended acceleration.

Wall Street Journal
Toyota Settlement