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Settlement Reached In Toyota Accelerator Recall Case



If approved, the agreement would provide payment or safety equipment to the owners of as many as 16 million Toyota vehicles.

A plaintiffs’ attorney says Toyota Motor Corp. has reached a settlement in a case involving hundreds of lawsuits over accelerations problems, The Wall Street Journal reports.

The settlement, filed in a federal court in California on Wednesday, will result in Toyota taking a $1.1 billion pretax charge this quarter, a person familiar with the matter said. The settlement is one of the largest in a lawsuit involving the automotive industry, said Steve W. Berman, one of the lead plaintiff lawyers.

If approved by U.S. District Court Judge James Selna, the agreement would provide payment or safety equipment to the owners of as many as 16 million vehicles. The settlement includes no admission of fault by Toyota. It also avoids the risks associated with battling a lengthy jury trial.

Toyota’s costs related to the recalls and probes likely exceed $3.1 billion. Toyota estimated in 2010 that the costs of recalls and lost sales world-wide would be around $2 billion, a figure that didn’t include the latest settlement, its legal fees, fines from the U.S. government and additional floor-mat recalls that came afterward. Toyota declined to give a total cost.

A U.S. government probe of accidents blamed on unintended acceleration absolved the electronics in the vehicles and found that driver error was to blame for most of the accidents with sticky accelerator pedals and floor mats playing a role in others.

Toyota continues to face two separate lawsuits related to the 2009-10 recalls, a consumer-protection and fraud suit in Orange County, Calif., and an unfair-business-practice case brought by the attorneys general of 28 states, the person familiar said.

The class-action lawsuit alleges that a flaw in Toyota’s electronic throttle-control system—and not ill-fitting floor mats and sticky accelerator pedals—were causing Toyota drivers to accelerate out of control and crash.

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