Toyota faces $2 billion payout over faulty DPFs

Owners of more than 260,000 Toyota HiLux, Prado and Fortuner models with alleged defects linked to diesel particulate filters (DPFs) in their vehicles now stand to be compensated by the car-maker after the Federal Court today ruled in their favour.

Handing down his judgement in a class action brought against Toyota Australia, Justice Michael Lee found that the 264,170 Toyota vehicles concerned – all sold between October 2015 and April 2020 – failed to comply with the statutory guarantee as to “acceptable quality” provided under Australian Consumer Law.

As a result, Justice Lee determined that the value of the affected vehicles had reduced by 17.5 per cent based on the average retail price, which could now see owners receive more than $7000 each in compensation.

If claims are now made on every vehicle, that could see Toyota hit with a total bill of about $2 billion.

Based on today’s judgement, the lead applicant in the class action, Prado owner Ken Williams, would be entitled to receive about $7500 for the reduced value.

But Williams also now stands to be awarded damages for lost income and excess tax payments, bringing his entitlements to more than $13,000 and highlighting the potential for compensation payouts to balloon where affected owners can prove they suffered similar losses.

Toyota says it is now reviewing the judgement before making any further comment, but a spokesperson claimed that “at every step, we believe that we have implemented customer-focused and technically grounded remedies to resolve customers’ concerns”.

The long-running dispute with owners relates to the DPF fitted to both the 1GD-FTV 2.8-litre four-cylinder turbo-diesel engine and the 2GD-FTV 2.4-litre.

The two Toyota DPFs have not always regenerated automatically and have also been prone to blowing unburnt fuel in the form of white smoke and emitting a noxious odour during regeneration.

Toyota did not issue a safety recall, but has conducted customer service campaigns to attend to the DPF problem and made running changes to all three vehicles concerned.

The company also upgraded its DPF warranty to 10 years and, as part of a separate investigation by the Australian Competition and Consumer Commission (ACCC), promised to review its systems and procedures for handling customer complaints.

Toyota avoided fines in the wake of the ACCC probe, however, the separate class action brought by law firm Gilbert + Tobin continued through the Federal Court.

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