DETROIT Dec 26 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.
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
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.