Toyota has agreed to settle a class-action related to its 2010 recalls for unintended acceleration that is valued at $1.2 billion to $1.4 billion, the automaker said Wednesday.
In 2010, Toyota was stung as it was forced to recall millions of its most popular models after reports surfaced of cars that accelerated uncontrollably.
Wednesday, Toyota said it plans to offer cash payments to eligible customers who sold or turned in their cars and trucks between 2009 and 2010 and to eligible current owners and lessees who will not be offered an upgraded brake-override system.
Toyota said it plans to retrofit additional models with a free brake-override system to provide an added measure of confidence that its vehicles can be stopped if they accelerate unexpectedly.
Toyota also agreed to pay another $250 million to reimburse owners whose vehicles cannot be retrofitted with the brake-override system.
"This was a difficult decision -- especially since reliable scientific evidence and multiple independent evaluations have confirmed the safety of Toyota's electronic throttle control systems," Christopher Reynolds, Toyota's group vice president and general counsel said in a statement. "However, we concluded that turning the page on this legacy legal issue through the positive steps we are taking is in the best interests of the company, our employees, our dealers and, most of all, our customers."
Toyota said it plans to take a onetime, $1.1 billion pretax charge against earnings to cover the estimated costs of the economic loss.
Attorneys representing Toyota owners who claim that their vehicles are prone to sudden, unexplained acceleration said Toyota has agreed to a settlement valued between $1.2 billion and $1.4 billion.
"After two years of intense work, including deposing hundreds of engineers, pouring over thousands of documents and examining millions of lines of software code, we are pleased that Toyota has agreed to a settlement that was both extraordinarily hard-fought and is exceptionally far-reaching," Steve Berman, managing partner of Hagens Berman Sobol Shapiro, said in a statement.
U.S. District Judge James Selna is expected to review the proposed settlement on Friday.
The settlement, which could involve millions of customers, does not end Toyota's exposure from the controversy surrounding reports of unintended acceleration. Dozens of wrongful-death and personal injury cases are pending in courts throughout the country.
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