The Toyota settlement recently submitted to US District Judge James Selna for approval will cost the company anywhere from $1 billion to $1.4 billion. All to settle the class-action suit brought against it for economic losses stemming from claims of unintended acceleration. This suit only addresses the perceived loss-of-value that Toyota owners and lessees feel they have suffered, alleging their cars were the victims of unintended depreciation even if they did not directly suffer from the alleged cases of unintended/sudden acceleration. This is a separate case than the wrongful death suits brought about by the unintended acceleration brouhaha.

When the settlement was announced, this was the overview of its payouts:
  • Toyota will install brake override systems in all 3.25 million vehicles subjected to the floor mat entrapment recall.
  • Another fund of $250 million will compensate current owners whose vehicles are not eligible for the free brake override system.
  • A fund of $250 million will compensate former Toyota owners who sold their cars from September 1, 2009 through December 31, 2010 for lost value.
  • Education grants valued at $30 million will be made to independent academic institutions to further study auto safety and enhance driver education.
  • All 16 million current Toyota owners will be eligible for a customer care plan that warrants certain parts allegedly related to unintended acceleration for three to 10 years.
Car and Driver attempts to break down where all that largesse is going, and who's going to get large off of it. We'll start from the top. Having something like three million cars run through service departments to have brake override systems fitted with Toyota stumping up the cash, is probably a win for dealerships and suppliers and even Toyota, obliquely, according to the report. The $250-million fund to reimburse owners whose cars can't be fitted with brake override systems will see each owner get a check for anywhere from $37.50 to $125 depending on the specifics of the model in question. Nobody wins that one.

The $250 million earmarked to compensate owners and lessees for lost value might end up being disbursed to millions of people and institutions, with estimates for individual payouts being from "hundreds of dollars to over a thousand dollars." The paucity of the payout doesn't just reflect the number of payees, it also reflects the near impossibility of an owner being able to determine and prove having suffered a specific amount of financial pain beyond standard depreciation. If anyone gets a trophy from that one, Car and Driver figures it's large used car dealers who moved a lot of Toyota metal during the time span.

$200 million is going to the 85 attorneys at 25 law firms for fees, plus another potential $27 million for their expenses.

Of the $30 million allotted for studies, up to $15 million will go to university studies of safety technology, another $800,000 going specifically to a university that will study "critical gaps in awareness and practice regarding defensive driving skills" including "driver pedal misapplication." The results from that study will be broadcast to the nation via a public safety campaign that will use some portion of the leftover $14.2 million dollars. Obviously, universities and advertising media make out all right with this, and hey, maybe we can all benefit from more research into safety technology.

The reporting doesn't address the extended customer care plan, but since the causes of alleged unintended acceleration haven't gone beyond suppositions of floor mats and pedal misapplication, and since the National Highway Traffic Safety Administration and NASA cleared the vehicles of any defects causative of unintended acceleration, good luck getting that warranty honored. Unless you need new floor mats in 2022.

That gets us up to a potential spend of $530 million so far, plus the cost of the brake override fitment. On top of that is another $200 million going to the 85 attorneys at 25 law firms for fees, plus another potential $27 million for their expenses. If the two hundred mil were split evenly among the 85 (it won't be – it will be disbursed to each according to their effort), that would make each advocate worth more than $2.35 million. And that's before expenses. It's pretty clear who wins that one, isn't it?

And assuming the settlement is approved by the judge, you'd have to figure Toyota wins. The company is about to be declared the largest automaker in the world again and it's predicting record sales for 2013. It could enter 2013 with this part of the ugly episode behind it and using money that has been saved just for the purpose. Not only that, the proposed settlement is less money than outsiders were expecting – word of the estimates actually sent Toyota's stock price up. So some things, like a few lawyers' bonuses, would change, otherwise much has remained just the same...


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  • 79 Comments
      markas24
      • 2 Years Ago
      Class action is like welfare for lawyers.
        S.
        • 2 Years Ago
        @markas24
        They've got to put food on their [24k gold] tables too :)
      404 not found
      • 2 Years Ago
      Over $2M goes to each attorney? I clearly chose the wrong field of study.
        ctsmith1066
        • 2 Years Ago
        @404 not found
        That's not how it works. The money goes to the attorneys' firms, not the individual attorneys themselves.
      montegod7ss
      • 2 Years Ago
      Liars, I mean lawyers, never lose. The only reason we need them is to protect ourselves from the other ones.
      ELG
      • 2 Years Ago
      just like every class action lawsuit, ever. but i guess its good to remind everyone
      calikev05
      • 2 Years Ago
      Lawyers live for this, or live off of it.
      • 2 Years Ago
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        S.
        • 2 Years Ago
        Well that escalated quickly.
        • 2 Years Ago
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      Judyz
      • 2 Years Ago
      In the United States of Attorneys only the Lawyers win. America went over the common sense cliff already.
      RUNRUNRUN@ilikeelectronics.com
      All this because idiots messed with their floor mats or couldn't tell (!?!) the accelerator pedal from the brake pedal? I'm proud to be an American, but I am ashamed at how many morons are on our roads.
      James
      • 2 Years Ago
      How horrible! Lawyers getting paid for doing WORK! Over a period of three years. Involving thousands of hours of research, strategizing and presentation on their personal parts. What would be even worse is if some of these lawyers OWNED a Toyota and got an additional $35! The world is so unfair and cruel!!!
        Generic
        • 2 Years Ago
        @James
        Your not just talking about hard work and the American dream though. Ethics plays a huge roll. What if the lawyers discovered for themselves that the case was unethical and still went for the money. Is that okay? As far as I'm concerned, Toyota simply paid out to shut the media up. I like facts and if it was a real case, NASA would have found fault. If our own NHTSA outsources to NASA to find the truth and fault can't be found, then what does that say about our justice department? From day one, I had a hard time believing this case. I was trying to find anyone who had real hard proof and no one seamed too. A lot of media was talking about it, but I couldn't find a single personal video of a run away Toyota, a real cause, a real fault that was documented from anyone. The whole thing started with a police officers run away Lexus. How a cop can afford a Lexus is odd to me, but for some reason that one case equaled every Toyota/Lexus having a magical run away problem. Even some jerk off claimed his Prius ran away on him, not realizing that they already had a brake override system and the media gave that clown attention and scared more people.
          Generic
          • 2 Years Ago
          @Generic
          It was actually NASA's Engineering and Safety Center (NESC) department that specializes in computer controlled systems, so yes, I would say they are more then qualified. More then you anyway.
          Generic
          • 2 Years Ago
          @Generic
          mikoprivat, your suggesting that some of Americas best and brightest engineers and scientist are not qualified to troubleshoot and reverse engineer a cars electrical system and ECU. Please get off AB and take your meds.
      styxmiko
      • 2 Years Ago
      the toyota propaganda machine has been put into motion... Only toyota loses morons, as they should. This is an impertinent, biased pro toyota article written by the paid off unscrupulous a$$holes who should not be working for a magazine or whatever autoblog is. Toyota's desperate desire to continue defrauding the american consumer knows no boundaries.
      Milwaukee, WY
      • 2 Years Ago
      Stupid Camry.
      sinistro79
      • 2 Years Ago
      ...or you could just avoid all the trouble, nonsense, and risk by not buying a Toyota.
        michigan
        • 2 Years Ago
        @sinistro79
        Why would this comment get voted down so much?
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