Toyota to allot $1.1 billion to settle unintended acceleration suits

Article by Anita Panait, on December 27, 2012

Toyota Motor Corp. will be allotting around $1.1 billion to settle various lawsuits and other claims in the United States -- all prompted by reports of unintended acceleration that the Japanese carmaker was faced with in 2009 and 2010. Toyota said in a statement that it has agreed to fit new braking override systems in certain vehicles as well as reimburse owners who suffered economic losses due to the said problems.

The settlement will cover up to 16 million vehicles, which will be provided with three- to 10-year warranties for components related to unintended acceleration, according to a statement released by the plaintiffs' lawyers.

Around 3.25 million vehicles would be eligible for new brake-override devices, according to the lawyers. The Wall Street Journal reported that Toyota did not admit any fault for the acceleration problems when settling a key piece of class-action litigation pending in U.S. District Court in California.

The settlements are expected to end the consumer fallout from the carmaker’s unintended acceleration cases, which plagued Toyota while it struggled with the US recession.

Jesse Toprak, a senior analyst with TrueCar.com, told Automotive News that Toyota wants to put its unintended acceleration recalls behind “once and for all.” He remarked that while the settlement could be very costly, it will allow Toyota to remove most of the “lingering financial uncertainty."

According to the plaintiffs' lawyers, the settlement could be valued at $1.2 billion to $1.4 billion, making it one the largest ever in the auto industry. U.S. District Judge James Selna is expected to review the settlement on Friday. According to Bloomberg, lawsuits claiming personal injuries and deaths caused by such incidents remain pending, with the first federal trial set for February 2013 in Santa Ana.

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