The Brief:
Toyota has agreed to pay $750m to settle two class actions over defective diesel exhaust filters, an Aussie record.
Quinn Emanuel is acting for the plaintiffs, with Ashurst Perkins Coie in Toyota’s corner.
Toyota is about to write the biggest cheque in Australian class action history.
The carmaker has agreed to pay $750m to settle two consumer claims over faulty exhaust filters in its diesel HiLux, Prado and Fortuner models.
If the Federal Court approves it, the deal will eclipse the Robodebt settlement as Australia’s largest.
For context, Toyota’s Australian operations made after-tax profits of $380m last financial year. That’s roughly half the settlement bill.
The case
The claims concern exhaust filters fitted to more than 250,000 diesel cars sold until Toyota addressed the problem in 2018. Owners copped blockages, white smoke, worse fuel efficiency and unexpected repair bills. They argued their cars had lost significant value.
The first case was filed in the Federal Court in 2019, with a related claim following last year. The plaintiffs won at trial in 2022. Then came the appeals.
Toyota’s argument hinged on the free fix it had offered since 2020. It argued that once the fix was available, the cars had suffered “no ongoing reduction in value” by the time the case reached trial. According to Toyota, paying damages on top of a repaired car would leave owners “overcompensated”.
The Full Federal Court agreed, finding damages should be reduced to account for the later repairs. The plaintiffs took it to the High Court.
This time, Toyota lost.
In November 2024, the High Court held that damages under section 272(1)(a) of the Australian Consumer Law must be assessed by what was known at trial about the “state and condition of the goods” at the time of supply. Later repairs don’t reduce the bill.
It sent the case back to Federal Court Justice Michael Lee to recalculate damages without any discount for the repairs. That hearing was set for this year. Toyota settled instead.
The settlement
The $750m payout will be shared among 136,000 group members. But not all of it will reach their pockets.
Funder Balance Legal Capital is seeking a 32.5% commission, or $244m, plus $35m in costs. That leaves about 64% for group members.
Funders will be watching closely. When the Robodebt settlement was approved in June, Omni Bridgeway’s proposed $71m commission was slashed in half. Omni is appealing.
Justice Lee will decide whether to approve the settlement on 20 November.
Who’s acting
Quinn Emanuel Urquhart & Sullivan is acting for the plaintiffs, briefing Peter Strickland. Ashurst Perkins Coie is on the record for Toyota, with Amy Munro SC as counsel.