Toyota Motor Corp. has agreed to a settlement in its vehicle acceleration lawsuits. The vehicle manufacturer will pay more than $1 billion after its vehicles began to accelerate out of control because of failed components.
The vehicle manufacturer will settle hundreds of lawsuits in order to move on from the incident, which it says caused the value of its various cars and trucks to plummet out of control.
Speaking to the Associated Press, Toyota owners’ lawyer Steve Berman noted:
“We kept fighting and fighting and we secured what we think was a good settlement given the risks of this litigation.”
The deal must now be approved by US District Judge James Selna.
Toyota says it will take a one-time $1.1 billion pre-tax charge against earnings to cover the cost of the settlement. The full value of the settlement is estimated between $1.2 billion and $1.4 billion.
During the 2009 Toyota acceleration incident, complaints began to flood in that Toyota vehicles experienced acceleration problems, eventually leading to car crashes, injuries, and, in several severe cases, even death.
After hundreds of cases were filed, the US District Court in Santa Ana consolidated them into economic loss and wrongful death cases.
Toyota is still facing lawsuits from people who are seeking compensation because of injury and death due to the Toyota acceleration issue.
$250 million from the settlement has been set aside for Toyota customers who sold their vehicles or turned in leased vehicles from September 2009 through December 2010.
As part of the settlement, Toyota will also use $250 million to add supplemental warranty coverage for certain vehicle components for more than 16 million customers. The company will also retrofit 3.2 million vehicles with a brake override system.
Toyota will also use part of the billion dollar settlement to fund safe driver programs and to put money aside for the research and creation of new safety systems in cars and trucks.
