Losses from auto industry class-action suits outpace others

Class-actions lawsuits against companies in the automobile industry have picked up in recent years.

In 2014, the auto industry saw a high of 46 class-action cases—double that of the 23 seen in 2010, the previous highest year for class-actions in the auto industry.

What will the Volkswagen emissions-testing scandal do to this chart in 2015? So far, the Advisen’s MSCAd database has more than 60 entries related to this Volkswagen incident. More than 40 are classified as class-action lawsuits.

Class actions for all industries appear to have fallen slightly since a high of 1,823 in 2012.

Class-action lawsuits against the auto industry tend to result in more loss than all industries. A loss of about $1 million results from 80 percent of cases in Advisen’s database. Many more class-action cases end up with losses of more than $1 billion than do class-actions for all industries.

A good example would be consolidated litigation against Toyota Motor Corp. related claims stemming from a defect that caused vehicles to suddenly accelerate. Millions of Toyota vehicles were recalled. The multidistrict case encompassed 11 actions in five district courts in four states.

After lengthy, multi-year litigation, Toyota agreed to a $1.1 billion settlement. 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. However, the settlement did not cover the personal injury and wrongful death lawsuits related to the recalls.