√Toyota HiLux, Prado, Fortuner diesel compensation: Are you sitting on a gold mine?

More than 264,000 owners of certain Toyota HiLux, Toyota Prado and Toyota Fortuner vehicles with faulty diesel filters could be entitled to thousands of dollars in compensation, but only if they sign up to the open class action from today.

More than a quarter of a million Toyota drivers in Australia will from today be asked to sign-up to receive thousands of dollars in compensation – their portion of a $2 billion settlement – after the Federal Court ruled certain versions of the Toyota HiLux, Toyota Prado and Toyota Fortuner were equipped with defective diesel particulate filters.

Although Toyota has announced plans to contest the ruling – and the astronomical sum of money involved – the landmark court case could deliver the biggest compensation payout in Australian corporate history.

The law firm handling the class action of behalf of the owners of affected Toyota vehicles – Gilbert and Tobin – will from today start to contact more than 264,000 drivers of certain Toyota HiLux, Toyota Prado and Toyota Fortuner diesel vehicles across Australia purchased from October 2015 to April 2020.

Gilbert and Tobin partner, Matt Mackenzie, told Drive: “Anybody who acquired one of the relevant Toyota HiLux, Toyota Prado, or Toyota Fortuner diesel vehicles from 1 October 2015 to 23 April 2020 is eligible to register for compensation.”

Toyota customers must register their details with the law firm to be eligible for the compensation payout – unless Toyota’s appeal succeeds and no payouts are awarded.

“Anybody who acquired one of those vehicles … will receive a notice approved by the court, either by email, text message, or post that says: ‘There’s been a judgment, you might be entitled to damages, but if you want to claim that compensation, you need to come forward and register your interest’,” said Mr Mackenzie.

The law firm has established a website to verify the details of each vehicle and identify customers who might be entitled to compensation – and crosscheck that with information supplied by Toyota.

“With that, we’ll be able to work out which customers are eligible for compensation and if so, how much compensation,” said Mr Mackenzie.

As with other “open” class actions, all owners of the same vehicles affected by the same fault are automatically included in the legal case.

However, only those who register their interest are entitled to compensation – pending any appeals.

There is no cost to affected Toyota customers to register their interest – no matter which way the court eventually rules after the appeals process runs its course.

But if the court case is successful, a portion of the compensation payout will go towards legal costs.

The litigators have told the court they will claim no more than 25 per cent of the compensation fee – and may claim much lower than this percentage, depending on how many customers come forward and register for the payout.

The Federal Court awarded compensation to each customer – estimated at 17.5 per cent of the value of each vehicle – because buyers of the affected vehicles suffered a financial loss “because they effectively overpaid for their vehicle,” said Mr Mackenzie.

In round numbers, it means many owners of affected Toyota vehicles could each receive between $8000 and $15,000 in compensation, depending on their circumstances.

The lead applicant in the case was Ken Williams, a Toyota Prado owner in Queensland whose vehicle was off the road for repairs to the faulty diesel particulate filter on multiple occasions, which in his case also led to a loss of income.

“The court found the lead applicant had suffered a reduction in value of the vehicle … and therefore it was deemed he paid too much stamp duty, too much GST, and too much in financing costs, because those costs were based on the (overvalued) purchase price of his vehicle,” said Mr Mackenzie.

“(Mr Williams) was also awarded damages for lost income. He had to have his vehicle serviced … multiple times,” said Mr Mackenzie. “He was a motor vehicle claims assessor who drove around Queensland (and) on three of those occasions where he had to have his vehicle serviced, he couldn’t go to his job that day … and so the court said he couldn’t do his job because of his vehicle.”

Mr Williams was awarded $18,400 in damages due to the reduction in value of his vehicle, portions of GST and stamp duty paid, lost income, and excess finance costs.

“Under the current judgment, (class action) group members claims have only been determined in respect of reduction in value of the vehicle and the associated GST,” said Mr Mackenzie.

“Questions about whether they’re entitled to (compensation for portions of) stamp duty, financing costs, and income foregone … are to be determined through a separate process later down the track.”

A total of 264,170 Toyota vehicles were fitted with either the 2.8-litre (1GD-FTV) and 2.4-litre (2GD-FTV) turbo diesel engines with faulty diesel particulate filters (DPFs).

Before Toyota introduced a technical solution, the faulty diesel particulate filters (DPFs) could clog the exhaust system and produce excessive white smoke, which reportedly led to increased fuel consumption – as well as police stops, complaints from other motorists, and fines from pollution authorities.

“One of the really interesting parts of the trial from my perspective was we (went through) tens of thousands of records of customer complaints that had been made to Toyota,” said Mr Mackenzie.

“Large numbers of (Toyota customers) referred to the people looking at them, yelling at them, abusing them on the road to ‘get your car fixed, it’s blowing out all this white smoke’.

“There were reports of the police pulling people over with white smoke billowing out the back of their car, and saying you need to go get your car fixed.

“What really struck me is a lot of small businesses – with HiLuxes used as tradie vehicles and delivery vehicles – were writing in saying ‘I can’t keep having to take my vehicle off the road to get it repaired, I’m losing money because I can’t make deliveries or I can’t attend job sites.’ They were the complaints that really struck a chord with me.”

On 7 April 2022, the Federal Court delivered a judgment following the trial in December 2021.

The Federal Court ruled in favour of the “representative applicant and group members” in the Toyota class action and determined the vehicles were “defective, not of acceptable quality, in breach of the Australian Consumer Law, and that Toyota engaged in misleading or deceptive conduct in selling those vehicles.”

“The true value of the vehicle was lower than what they paid because the defect … reduced the value of the vehicle,” said Mr Mackenzie.

“The judge’s view was the approximate reduction in value was 17.5 per cent of the average retail price of each of those vehicles.

“He also said you’re entitled to an additional 10 per cent of that amount to account for the GST.

“Following that judgment, the court approved notices to be issued to all the group members.

“So anybody who acquired one of those vehicles … is going to receive a notice approved by the court, either by email, text message, or post that says: ‘There’s been a judgment, you might be entitled to damages, but if you want to claim that compensation, you need to come forward and register your interest’.”

Drive understands Toyota Australia has replaced diesel particulate filters on thousands of affected vehicles multiple times, and has bought back an undisclosed number of vehicles.

Toyota has since introduced a new engine program on affected vehicles, which activates a burn-off of the diesel particulate filter more frequently – to avoid a build-up of white smoke.

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