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Toyota's $1.1B Recall Settlement Includes No Admission of Fault

By Andrew Lu on December 27, 2012 8:57 AM

Toyota has agreed to a $1.1 billion recall settlement over claims of its vehicles accelerating unintentionally.

The settlement would compensate consumers for economic losses related to any safety defects in their vehicles, but does not cover claims for wrongful death and injuries, Reuters reports.

While the settlement would compensate many car owners, it does not include an admission of fault by the Japanese automaker, nor does it include an acknowledgement that its cars were actually faulty. In fact, Toyota's attorneys continue to maintain that "reliable scientific evidence" and "independent evaluations" have confirmed the safety of its cars.

The billion-dollar settlement covers a wide range of vehicles spanning from 1998 to 2010 from the company's Toyota, Lexus, and Scion brands. However, it wasn't until 2009 that Toyota's alleged vehicle acceleration issue started getting national attention, after several people were killed and injured when their cars allegedly sped up unexpectedly and would not stop, according to Reuters.

While Toyota has agreed to pay the $1.1 billion settlement, the automaker has made several statements defending the safety of its technology and blaming other factors for the acceleration problem such as sticky gas pedals and floor mats that were too big. So why did they choose to settle?

Perhaps because class action litigation can take many years to play out in court. During this time, Toyota's resources would be tied up in the courtroom instead of in the design room, showroom, and other areas of its business. In addition, even if the company had continued to fight the lawsuit in court, there was no guarantee it would have won.

So the company decided to settle the lawsuit and put the litigation (and one the largest auto recalls ever) behind them.

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