Toyota Agrees to pay $1.4 Billion for Acceleration Issue image

According to court fillings, Toyota said it will pay $1.4 billion to settle the US litigation claims according to which its vehicles suddenly accelerated.

According to court fillings made public on Wednesday, December 26th, Toyota agreed to take a one-time pre-tax charge of $1.1 billion for the estimated costs of this settlement. Law firm Hagens Berman, which represents Toyota owners, said the settlement was estimated at a price varying between $1.2 billion and $1.4 billion, and that the total package was valued at more than $1.3 billion.

The plaintiff memo states that the deal would be “a landmark, if not a record, settlement in automobile defect class action litigation in the United States,” while Toyota said it would mean a ‘significant step forward’ for the Japanese company which has seen its image tainted by the controversy.

Toyota has to make direct payments to its customers who have confronted with this issue, as well as the installation of a brake override system in almost 3.25 million cars. The settlement includes $250 million fund for the former Toyota owners who sold the cars and $250 million fund for owners not eligible for the brake override system.