Toyota sets aside $1.1 bn for lawsuits over car defects

Japanese car manufacturer Toyota Motor Corp has reached an agreement worth $1.1 billion to settle a sweeping class-action lawsuit in the US involving unintended acceleration in some of its vehicles. The company recalled 7.43 million vehicles worldwide to fix the problem.

In a statement on Wednesday, Toyota had said it would take a one-time $1.1 billion pre-tax charge against earnings to "cover the estimated costs of the economic loss settlement and possible resolution costs of civil litigation brought in California by the District Attorney of Orange County and an investigation by a multi-state group of attorneys general stemming from previous recalls."

The proposed settlement will compensate customers for economic losses related to possible safety defects in Toyota vehicles, covering most of the litigation involving unintended acceleration, although it does not cover claims for wrongful death or injuries.

It comes after Toyota paid nearly $70 million in fines after the US National Highway Traffic Safety Administration said it had failed to recall millions of vehicles in a timely fashion.

Under the proposed settlement, Toyota will offer special vehicle coverage for up to 150,000 miles on 16.3 million vehicles and will retrofit as many as 2.7 million vehicles with brake override systems, the statement said.

Toyota, Lexus and Scion vehicles sold in the United States spanning the model years 1998 to 2010 are covered by the action, according to court filings made public on Wednesday. Thirty models are affected, including the top-selling Toyota Camry midsize sedan and Corolla compact car.