Tuesday, 6 April 2010
Toyota Fined More Than $16 Million in Penalties for Delay in Informing Federal Regulators of Safety Problems
The US government has accused Toyota of possibly concealing dangerous defects in its vehicles. The automaker is looking at the possibility of approximately $16.4 million in penalties.
It's the latest blow to Toyota, which is already reeling from lost sales, and personal injury, wrongful death and consumer fraud lawsuits worth possibly billions of dollars. The fine itself is peanuts for the automaker, but it does face a dilemma about whether to pay the fines or not. If Toyota does go ahead and pay the penalties, it could negatively affect the automaker's position vis-à-vis the lawsuits filed against it. If it does not pay the fines however, the company can expect the agonizing controversy over the acceleration issues to stretch on indefinitely.
According to Transportation Sec. Ray LaHood, there is evidence to show that Toyota was aware of a dangerous defect in millions of its vehicles, and failed to take action to prevent injuries to motorists. It is likely the highest penalty paid by an automaker. The last major settlement paid by an automaker was by General Motors in 2004. The penalty in GM's case was for just $1 million.
Toyota must make clear within two weeks if it intends to pay the penalties or wants to contest them. However, as the investigations progress, federal regulators may impose additional fines on the beleaguered automaker.
The fine is related to the automaker's failure to inform the National Highway Traffic Safety Administration of defective automobiles in a timely manner. Under federal laws, an automaker must inform the federal agency about these defects within five days of finding out about it. California product liability attorneys have learned that the NHTSA has records to show that Toyota knew about the sticking gas pedals at least since September 29, 2009. That was the day the automaker issued repair procedure instructions to distributors in Europe and Canada to fix complaints of sticking gas pedals.