Friday, December 28, 2012

Toyota reaches $1.4B settlement over recalls

2 hrs.

Toyota Motor Corp. 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.

Steve Berman, an attorney for the plaintiffs, called the settlement the largest?in U.S. history involving automobile defects.?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 must?still?be approved by a California federal judge.

The deal 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 also?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.

Toyota has recalled more than 14 million vehicles worldwide due to acceleration problems in several models and brake defects with the Prius hybrid. Toyota has blamed driver error, faulty floor mats and sticky accelerator pedals for the unintended acceleration.

Information from the Associated Press and Reuters was included in this report.

Source: http://www.nbcnews.com/business/toyota-reaches-1-4-billion-settlement-over-acceleration-problems-1C7659318

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