Toyota to settle acceleration cases for up to $1.4 billion
DETROIT (Reuters) - Toyota Motor Corp (7203.T) has agreed to pay as much as $1.4 billion to settle U.S. litigation claims that its vehicles suddenly and unintentionally accelerated, according to court filings made public Wednesday.
Toyota said it will take a one-time pre-tax charge of $1.1 billion to cover the estimated costs of the settlement.
Hagens Berman, the law firm representing Toyota owners who brought the case in 2010, said in a press release the settlement was valued between $1.2 billion and $1.4 billion. In a plaintiff memo filed in court, the firm estimated that the total package was "conservatively valued" at more than $1.3 billion.
The deal amounts to "a landmark, if not a record, settlement in automobile defect class action litigation in the United States," according to the plaintiff memo. Toyota described the settlement as a "significant step forward" for the Japanese automaker, which has seen its image take a hit from the controversy.
The settlement, which must be approved by a California federal judge, includes direct payments to customers as well as the installation of a brake override system in about 3.25 million vehicles, plaintiff attorneys said.
The terms include a $250 million fund for former Toyota owners who sold vehicles at reduced prices because of bad publicity, and a separate $250 million fund for owners not eligible for the brake override system.
Plaintiff attorneys are slated to receive up to $200 million in fees and $27 million in costs, according to court documents.
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