“Early Moves In Court Could Limit Toyota Recall Liability”
by Erin Marie Daly, Law 360 (Portfolio Media. Inc., February 18, 2010) (http://bit.ly/mKczdV)(PDF version).
Law 360, a prominent online publication, recently interviewed Jeffrey Judd about the civil litigation facing Toyota Motor Company following multiple recalls of the company’s popular Prius hybrid. Mr. Judd is an acknowledged expert on civil litigation, regulatory investigations, and criminal inquiries related to vehicle recalls, having developed this expertise representing Ford Motor Company. Asked to comment about how Toyota’s handling of the recalls will affect the company’s defense strategy in the face of mounting lawsuits by consumers, auto dealers, and shareholders, Mr. Judd said:
“To date, it’s been a public relations disaster, in large part because the perception is that Toyota doesn’t have its hands around the problems or a very effective management strategy to fix the issues. The longer this perception goes on, the more it puts Toyota behind the eight ball and increases the tension between the company’s public relations and legal strategies . . . The standard PR advice is that the company should take responsibility, apologize and fix the problem as soon as possible. But legally, you want to be careful not to make any admissions that could be used in litigation later. So far, Toyota hasn’t managed to demonstrate to the public that it knows what the root cause of the problems are, or what the solution is. [This] gives momentum to plaintiffs and increases potential settlement values.”
When asked about how Toyota will likely respond to the personal injury cases allegedly caused by uncontrolled acceleration, Mr. Judd responded: “The good news is that there likely won’t be thousands of cases involving huge coordination procedings with these types of [personal injury] cases. But the publicity will cause Toyota to be more willing to pay higher settlement figures just to get out of the press and demonstrate that they’re doing the right thing [for their customers].”
Finally, when asked about whether the recalls and bad publicity are likely to have a long-term effect on Toyota’s business, Mr. Judd said: “Brand loyalty is a fairly sticky thing. People are usually willing to continue to be loyal as long as they’re convinced about the quality of a manufacturer’s products, so if Toyota hunkers down and fulfills its main mission [of producing safe, reliable, economic autos], that will likely be the [long-term perception customers] take home.”
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