Toyota to face €2bn case over car recalls
Published 10/03/2010 | 05:00
THERE was no let up for the troubled Toyota car company yesterday as American owners of the cars filed dozens of group lawsuits claiming that massive safety recalls have destroyed the value of their cars.
The action could cost the company more than $3bn (€2.2bn). The estimate does not include potential pay-outs for wrongful death and injury cases, which could reach in the tens of millions each.
The sheer volume of cases involving US Toyota owners claiming lost value -- six million or more -- could prove far more costly.
Such class-action lawsuits "are more scary for Toyota than the cases where people actually got injured," said Tom Baker, a University of Pennsylvania law professor.
"A super-big injury case would be $20m. But you could have millions of individual car owners who could (each) be owed $1,000. If I were Toyota, I'd be more worried about those cases."
As Toyota continues to deal with the recalls and wavering public confidence in its vehicle safety, its biggest financial fight may be in the courtroom.
A key decision could come at a March 25 hearing in San Diego where a panel of judges will consider whether to consolidate the mushrooming cases into a single jurisdiction.
After that, a judge will decide whether all claims filed by Toyota owners nationwide can be combined in a single legal action and whether the claims have enough merit to move toward either trial or settlement.
The lawsuits began last autumn when Toyota began recalling eight million vehicles worldwide because of persistent complaints about sudden unintended acceleration.
One leading lawyer in the class-action effort, university law professor Tim Howard, said the number of owners claiming economic damages because of the recalls could reach six million.
If each were awarded a conservative $500, Toyota would have to fork over $3bn in economic loss damages alone.
Meanwhile, in Los Angeles, the driver of a 2008 Toyota Prius said his car uncontrollably accelerated to over 90mph on a San Diego County freeway before a California Highway Patrol officer helped him stop the car, police said.
The driver, 61-year-old James Sikes, was not injured in the incident on Monday, which is another claim of unintended acceleration that has caused a huge image crisis for Toyota
The incident occurred in the same county where an off-duty California Highway Patrol trooper and three family members were killed last August in an incident that brought the issue to national attention and led to the first major recall over unintended acceleration.