$1B settlement approved by court in Toyota recall
A California judge has approved a settlement that will return $1 billion US to Toyota vehicle owners affected by a 2009 recall over claims of faulty accelerators.
About 22 million U.S. consumers will be affected by the deal, which provides compensation for the reduced value of their vehicles.
The Japanese automaker had numerous complaints that its cars accelerated on their own, causing crashes, injuries and even deaths.
The compensation covers economic losses related to the problems, which Toyota blamed on driver error, faulty floor mats and stuck accelerator pedals.
The scandal led company chief executive Akio Toyoda to apologize in testimony before Congress and vow that the company would overhaul the way it handled quality control. However, Toyota is not admitting fault in the settlement announced Friday.
Steve Berman, an attorney representing Toyota owners, has said the settlement is the largest in U.S. history involving automobile defects.
Terms of the deal finalized by U.S. District Judge James Selna include:
- $250 million to customers who sold or turned in leased vehicles between September 2009 and December 2010, taking a loss on their purchase.
- A $250-million program for 16 million current owners to provide supplemental warranty coverage for certain vehicle components.
- Retrofitting about 3.2 million vehicles with a brake override system.
- Cash for new research into advanced safety technologies.
Toyota still faces wrongful death civil suits.
The company had previously said it will take a one-time, $1.1 billion pre-tax charge against earnings to cover the estimated costs of the settlement.