Toyota (TM) got a small taste of things to come. The company already faces a raft of class action and liability suits. Now, a suit which involves the crash of a Lexus ES 350 after it mysteriously accelerated to speeds of over 100 mile per hour has been brought. Four people were killed in the crash. Family members filed the legal action, which does not specify damages
While it is impossible to say how much the Lexus crash could cost, wrongful death actions often bring plaintiffs millions of dollars. Merck (MRK) had 6,400 suits filed against it due to dangerous side effect of its drug Vioxx. One case against the company resulted in an award of $253 million. The amount was eventually reduced on apppeal to $26 million.
The number of Toyota’s recalled in the US is close to six million. It is too early to tell how many people will say that defects in the cars made by the company, which had brake and accelerator problems, actually caused physical injury. Some of the suits against Toyota will likely be bogus but that does not mean that the car firm will not have to mount a defence in each case.
Toyota’s sales were not down as much as expected in February–only 10%. Customer loyalty to the brand and positive consumer perception, built over decades, may keep the Japanese firm from suffering huge drops in the number of vehicles it sells in the US and elsewhere. But, the lawauits will come, perhaps by the hundreds. And, the real legacy of the Toyota recalls may be the billions of dollars that the company will have to pay to settle all that litigation.
Douglas A. McIntyre
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