Toyota poised to put legal troubles in rear view mirror

Dec 28 2012, 09:10 IST
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The Japanese automaker faces possibly hundreds of personal injury lawsuits. (Reuters) The Japanese automaker faces possibly hundreds of personal injury lawsuits. (Reuters)
SummaryThe Japanese automaker faces possibly hundreds of personal injury lawsuits.

Toyota Motor Corp eliminated a huge obstacle with a US settlement over unintended acceleration in its cars and trucks, leaving it to fight smaller cases that will be harder for plaintiffs to prove and less likely to damage the company's growing sales. While the Japanese automaker still faces possibly hundreds of personal injury lawsuits related to claims that its vehicles accelerated unintentionally, Wednesday's $1.1 billion settlement announcement will remove the last big roadblock to putting the issue behind it. Sean Kane, president of Safety Research & Strategies and an outspoken critic of Toyota who has assisted plaintiffs' attorneys against the automaker, said the settlement covered the biggest financial hit for Toyota.

"Those are not billion-dollar cases," he said of the pending personal-injury lawsuits. "Those are at best million-dollar cases or multimillion-dollar cases. With a company like Toyota, that's not even something that's a blip on their radar." At the time, the recall around the unintended acceleration issue and resulting lawsuits were a surprise for a company long associated with quality and reliability, and the resulting fallout led President Akio Toyoda to apologize publicly. Lee Kaplan, a product liability lawyer in Houston, said plaintiffs in the injury and death cases also will have an uphill battle in court because they will need to prove deficiencies in Toyota's equipment.

“I have never seen anyone identify the single cause of the problem," he said. "Without identifying a true scientific or technical basis, pinning a verdict on Toyota will be hard." Toyota said it agreed to spend $1.1 billion to settle sweeping U.S. class-action litigation over claims millions of its vehicles accelerated unintentionally. The recall fallout related to the issue was a $2 billion hit to earnings in the company's 2010 fiscal year. Judge James Selna is expected to review the settlement on

Friday in U.S. District Court in Santa Ana, California. However, final approval and disbursement of the money may not occur for several months.

The proposed settlement will compensate customers for economic losses related to possible safety defects in Toyota vehicles, covering most of the litigation involving unintended acceleration.

WRONGFUL DEATH

About 16 million Toyota, Lexus and Scion vehicles sold in the United States spanning the model years 1998 to 2010 are covered by the settlement. Company officials have maintained the electronic throttle control system was not at fault, blaming ill-fitting floor mats and sticky gas pedals. A study by federal

safety officials at the National Highway

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