Toyota Motor Corp. 7203.TO +2.61% agreed to pay about $1.1 billion to settle a class-action lawsuit stemming from complaints of unintended acceleration in its vehicles that soured its reputation for quality and undermined its sales globally.
The settlement, filed in a federal court in California on Wednesday, will result in a $1.1 billion pretax charge to earnings this quarter, Toyota said. Owners of some 16 million Toyota, Lexus and Scion vehicles would be eligible for payments and safety updates that would vary depending on their vehicle and its age.
The settlement includes no admission of fault or unlawful conduct by Toyota and allows the company to avoid the risks associated with battling a lengthy trial. "One of our overriding goals has been to vigorously defend the safety of our vehicles, and we believe we have done that," said Mike Michels, a Toyota spokesman.
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