“Products reliability is an area of law where manufacturers, distributors, suppliers, and retailers become responsible for injuries caused by products they avail to customers” (Friedman, 2004). There are different product liability laws in the United States. However, they differ from state to state. The most common product liabilities in the country are consumer protection, negligence, strict liability, and breach of warranty. Additionally, there are three main types of product liability claims that include manufacturing t, design, and marketing defects (associated with failure to warn). Customers are usually allowed to file cases against manufacturers and other personnel in that line when they get injuries because of manufacturer's mistakes and design defects. Automobile industry in the United States has been one of the areas challenged by customers due to these laws. This is because of numerous lawsuits filed against companies for manufacturing and design defects that have led to many deaths and injuries of vehicle users. Toyota manufacturers have fallen victims of many lawsuits being filed against the company. “There are some lawsuits that are traced back to 1999” (Ryu, 2012). This paper discusses a lawsuit filed against Toyota in the United States and how the issue was solved. On the other hand, it also looks at the changes that were made in the organization, legal agencies that were involved, and recommendations to remedy such in the future.
Toyota Company and Product Safety issue that Led to the Lawsuit
Toyota is an automobile company based in Japan. However, it has developed strong markets for its products across the world, especially in the US. The company has been one of the most successful and powerful automobile companies with some of its brands, such as Toyota Prius, showing high performance in the market. When new brands become high-selling in the market, the manufacturer increases its pace of manufacturing to take advantage of high demand in the market. “This has enhanced sustainability in the company over the years considering that in the US market, there are strong opponents, such as Ford and BMW” (Cross & Miller, 2011). However, in previous years, the company has failed due to criticism coming from consumers and other organizations because of poor product safety. This is said to have been brought about by the “increased rate of manufacturing of brands because of high demand taking it as an opportunity” for investment (Ryu, 2012).
In addition, the company has spent billions of dollars on repaying and resolving lawsuits that have been filed against it with many of them emerging after 2006. There are different lawsuits held against the company in the United States. One of these lawsuits was due to the product safety issue where the company was accused of products liability and negligence. This was due to unintended acceleration, an issue that had been brought up by a number of individuals. In that specific issue, the case filed in California state against Toyota and Lexus car dealer was over the death of four people. The car, “ES350 led to death of four members of one family when it apparently involuntarily accelerated to 120 mph before killing the four” (Viana, 2011). The company was accused of neglecting design defect in the acceleration system of the car leading to fatal accident.
Legal Theories Used By the Plaintiff to Recover in This Lawsuit and Solutions
According to the Consumer Protection Act in the US Constitution, complainants have to be compensated if investigation shows that the manufacturer is guilty. Toyota sent its investigation team to the field to observe the matter with investigators from the criminal investigation department. In case where design of the automobile was found to be the cause of an accident, the complainant had to be compensated in accordance to the law. “The National Highway Traffic Safety Administration is charged with the duty of charging the manufacturer; however, this should be in line with the Lemon Acts” (Feinman, 2006). The plaintiffs must prove that the accident was not caused by other mistakes such as driving while drunk or poor driving skills. They have to prove that what resulted to the accident were defects from the design of the car. In this case the investigators had also to play a key role in proving that the manufacturer was guilty.
After the investigations were carried out, it was clear that this was a design defect since the car had apparently involuntarily accelerated to 120 mph before killing the four. The decision of the court was a compensation of $ 17.4 million to the family members. Toyota was also given the duty of having a clear record of all its manufactured vehicles in the market and their safety. The company was also advised to “engage in more technological research in order to develop long lasting solutions to such issues” (Ryu, 2012). The decision that was reached was the right because the investigators from the company also agreed that there was a design defect in that specific car. In addition, considering that life of four from the same family had been lost, such a hefty compensation fee was worthy so that the public could not take a negative picture about the company despite the skirmish.
Changes that have taken place in Toyota Company to ensure Greater Safety of its Products
Considering the challenges that have faced Toyota Company in the past, there are different changes that have been implemented for greater safety of their products. One of these changes is increased technological research at all the levels of manufacturing. This is made to ensure that all the manufacturing units are dependent and sound so that none of them acts as the source of design or manufacturing defects. The inspection team in the company has also been empowered to ensure that the quality and safety of the final products is guaranteed. All the vehicles have to be “thoroughly scrutinized to ensure that they are safe for users” (Cross and Miller, 2011). At that time, the inspection team that was hired was private. Therefore, the company can still involve external parties in its operations as a way of increasing expertise.
Within the organization, employee education and training has been enhanced. This is crucial since it plays a crucial role in mitigating, “avoiding and reducing risks associated with the manufacturing process” (Viana, 2011). In addition, employees play a crucial role in the manufacturing process.
Toyota also recalled many of its cars. This was made to ensure that they were rechecked so that they could not lead to such cases in future. It is estimated that about 14 million cars were recalled. This was crucial to give customers confidence when driving. Additionally, customers who were not convinced that “Toyota cars were safe were also allowed to bring them back for inspection” (Viana, 2011). This is a trend that helped the company stabilize after its sales had dropped drastically.
Regulatory Agency that Oversees the Automobile Industry in the U.S
The regulatory agencies in the automobile industry usually differ from one state to another. However, there is Consumer Protection Act that protects all consumers from all the industries. These laws are usually upheld at state level and are used in courts to make rulings. “There is the National Highway Traffic Safety Administration that is involved in investigations to provide evidence” (Friedman, 2004). However, the plaintiff has to show prove to the court and the justification of prove is usually made by the latter body. They also provide a way in which ruling should be exercised depending on the product liability issue. Additionally, there is the Motor Vehicle Product Liability Law which is usually used to make judgments to automobile companies in case of product liability issues.
Prevention is always better than cure. This is why Toyota should make necessary changes to ensure that such problems are mitigated at all levels. One of the things that the company needs to prioritize is consumer education. In the past, there have been cases where dealers have failed to offer any education to buyers, and in the long end Toyota is accused of failing to educate consumers. Therefore, the company should link closely with distributors and “dealers to ensure that consumers are educated before they make any purchases” (Cross & Miller, 2011). This will mean monitoring what the dealers and distributors are doing so that they do not become the causes of the problems that will finally fall on the side of the manufacturer.
The company should also initiate a system where its consumers report any defects to them rather than having to rush to the court and publicizing their issues. This is crucial since, it will ensure that the image of the company in the public does not become heavily tainted and yet some of the claims may be fraudulent.
Toyota Company should educate customers and give them the opportunity of bringing their vehicles for regular inspection whenever they feel that they have defects. This should be done freely as a customer service. This is a strategy that can work best in restoring confidence among consumers and make the image of the company reputable. An inspection team should be employed to serve such customers even if the car they want to return was bought many years before. “Customers should also be allowed to make their recommendations and air their views, but only to the company” (Ryu, 2012). This is a strategy that can work best to enhance customer satisfaction.
Considering that there are different automobile companies operating in the US, Toyota Company should seek for benchmarking in some of the companies. This is crucial to ensure that it gets much expertise and technological advancements in the market. This will also motivate their employees to become more innovative.
Product liability is an issue that has led to crumbling of some companies. Automobile industry is one of the sensitive industries since when defects are found to have led to an accident, it becomes a problem to the manufacturer. Many automobile manufacturers have been faced with different challenges in the past, where consumers have filed lawsuits against companies. Lawsuits are usually filed in case of manufacturing defects, design defects, and marketing defects. Toyota has been faced with many challenges as many lawsuits have been filed against the company. This paper has examined a case where the company was accused of design defects in a car leading to the deaths of four people from the same family. The paper analyzed how the case was resolved and the changes that were made in the company. Additionally, it examined recommendations for Toyota Company to reduce, mitigate, and avoid such skirmishes in future.