Earlier today, Toyota announced it has agreed to settle a class-action lawsuit brought by owners of several cars recalled due to problems with unintended acceleration. The total price tag will run to over $1 billion.
The agreement, filed in federal court in California, was called one of the largest product-liability settlements in history.According to the plaintiffs' attorney, this is the biggest car-defect settlement in American history. The suit was brought almost three years ago due to numerous complaints that forced Toyota to recall cars between September 2009 and December 2010. Toyota will pay consumers as much as $1.4 billion to settle the charges, and take a $1.1 billion charge against its earnings to fund the settlement. It will compensate customers for the depreciated value of their cars and retrofit other cars to remove faulty floor mats and sticky pedals.
If the agreement is approved by the court, Toyota would compensate current and former owners for loss of value on vehicles recalled because of faulty floor mats and other conditions that could cause sudden acceleration.
Toyota has also agreed to install special safety systems on 3.2 million vehicles that were recalled for floor-mat problems.
The settlement is due to be up for approval after the first of the year.