The Settlement

Toyota Settlement Details

By the end of 2012 it was announced that Toyota Motor Corp. gave its consent to pay approximately $ 1.1 billion to compensate owners for a loss in value of their vehicles due to recalls stemming from unintended acceleration. According to Toyota officials the settlement, which is said to be the largest in U.S. history involving vehicle defects, will resolve hundreds of lawsuits filed against Japanese automaker since 2009.

The settlement was preliminarily approved by District Judge James V. Selna. Final Approval Hearing is planned to be held on June 14. According to the settlement former and current owners of Toyota vehicles included in it will get information through notices expected to be mailed in early March.

Toyota will offer payments in cash about $250 million to customers who sold or turned in leased cars between September 1, 2009 and December 31, 2010. The amount each consumer will receive depends on the year and model of his/her Toyota car and the state in which the vehicle was bought. The company is also going to allocate supplemental warranty coverage for certain components of the vehicle and to remodel about 3.2 million cars with a brake override system (designed to cut the throttle when the brake pedal is pushed even if the accelerator pedal is depressed). The settlement also envisages establishing education programs for drivers and funding new research on advanced car safety technologies.

The settlement does not include claims by people who filed lawsuits to seek compensation for injury and death due to sudden acceleration. Initially all the claims were divided into two categories: economic loss and wrongful death. The first trial involving the suits from the second category is scheduled for February. Toyota is still to face two separate lawsuits related to vehicle recalls in 2009-2010, a fraud and consumer protection lawsuit in Orange County, California, as well as unfair-business-practice case filed by the 28 states attorneys general.

Recently Toyota has recalled over 14 million cars  worldwide for problems related to unintended acceleration. A series of accidents in Toyota vehicles impelled National Highway Traffic Safety Administration (NHTSA) to launch an investigation conducted by National Aeronautics and Space Administration (NASA) experts. After 10-month investigation NASA officials reported unintended acceleration was not specified by flaws in electronic throttle control system. It is a result of «floor mats entrapment» (loose floor mats inadvertently entrapped gas pedal while the car was in motion) and sticking accelerator pedals, reads the report.

The U.S Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) fined Toyota Motor Corporation 17.35 million for failing to notify the Agency about safety defect in a timely manner.

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