Access To Justice

As someone who’s been involved in numerous lawsuits related to product liability, I can tell you I have seen it all.  But the Toyota recall is about as close to a perfect storm as it gets.  Case in point: Congress is now holding hearings on the matter.

In true lawyerly fashion, let’s review the facts:

•    Start with a company that has built its brand on quality.

•    Add in the largest recall in the company’s history and one of the ten largest of all time, totaling more than 8 million vehicles, 6 million in the U.S.

•    The recalls relate to everything from faulty gas pedals to brakes, all absolutely critical to safety.

•    According to the National Highway Transportation Safety Administration (NHTSA), 34 deaths allegedly were caused by gas pedal problems.

•    Toyota has allegedly been aware of the potential for problems with accelerators as early as 1999, and the NHTSA had been investigating the issue dating back to that period.

So, if I may paraphrase, it sure seems as if Toyota had some serious problems with its product that could potentially be dangerous, and the company chose to be in denial about it.

Now, once the company issued a recall, how it handled the matter was also a case study in what not to do.

•    To begin with there is evidence that Toyota was basically forced into the January 21 recall by the NHTSA.

•    Toyota CEO Akio Toyoda waited almost two weeks to comment on the recall before apologizing and calling the situation a “crisis”.

• Then, U.S. Secretary of Transportation Ray LaHood tells Toyota drivers not to drive their cars, only to later say he “misspoke”.

•    Toyoda says he won’t testify before a Congressional Committee; in the face of a threatened subpoena, he agrees to testify this week.

This brings us to the consequences of all of this mismanagement and lack of candor and transparency.

•    An estimated 44 class-action lawsuits have been filed under state and federal law by the end of last week.

•    Claims could reach $3.6 billion, based on an average loss of $600 per vehicle.

•    There are dozens of other individual lawsuits alleging that Toyota knew of the risk and did not act swiftly enough to correct the problem. Experts say these cases could cost Toyota billions in settlements.

•    At least one wrongful death lawsuit has been filed for $100 million related to the death of a Texas couple.

Toyota had serious problems with some of its product.  Instead of acknowledging the problems early on and taking the appropriate steps, the company chose a strategy that combined benign neglect with the finger-crossed hope that it could sweep things under the rug.  It is a strategy that too many businesses employ when product defects are in question.

The result: numerous lawsuits that will likely cost the company billions of dollars and damage its brand well into the future.

More importantly, what Toyota did was wrong.  It put people at risk to save a buck.  The company valued its reputation and revenue over the safety of customers.

If you’re one of those customers, you can find more information about the recall at Toyota’s website.