Toyota Agrees to Pay US$1.4 Billion to Settle Unintended Acceleration Lawsuits

In the past 10 years, the U.S. National Highway Traffic Safety Administration has received nearly 3,100 complaints about sudden acceleration issues in Toyota vehicles. Those complaints alleged 93 deaths, but the Administration has confirmed a direct link in just five of them.

The issue made headlines in 2009 after a wrongly installed floor mat on a loaner Lexus ES caused the vehicle to crash, resulting in the death of the driver and his three passengers.

Toyota was forced to recall 7.1 million vehicles in the U.S. and another 5.3 in the rest of the world over the issue and was slapped with US$70 million in fines by the NHTSA as it failed to recall the affected vehicles on time.

Moreover, the Congress conducted its own investigation and even summoned Toyota CEO Akio Toyoda to testify after company documents revealing that the company knew about the problems but didn’t act in order to save money came to light.

On Wednesday, December 26, the Japanese carmaker agreed to settle the resulting lawsuits. Its attorneys said that the settlement is worth between US$1.2-1.4 billion, which makes it the largest-ever in the automotive sector.

Toyota said the money will “cover the estimated costs of the economic loss settlement and possible resolution costs of civil litigation brought in California by the District Attorney of Orange County and an investigation by a multistate group of Attorneys General stemming from previous recalls.”

Apart from paying owners and former owners of its cars, Toyota will also install a brake-override system, which cuts the throttle when it detects simultaneous signals to accelerate and brake, in more than 2.7 million vehicles and extend warranty coverage up to 150,000 miles on 16.3 million vehicles.

Christopher P. Reynolds, group vice president and general counsel of Toyota Motor Sales U.S.A. and chief legal officer of Toyota Motor North America said:

“This agreement marks a significant step forward for our company, one that will enable us to put more of our energy, time and resources into Toyota’s central focus: making the best vehicles we can for our customers and doing everything we can to meet their needs.”

By Andrew Tsaousis

Story References: Detnews



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