Toyota D&O claims

Oh dear. The train-wreck-in-slow-motion that is Toyota’s current crisis has got a lot worse today with the announcement that they are having to recall all their Prius models worldwide to sort out brake problems. Toyoda-san, the grandson of the founder, can’t be having a good day.

What sort of claims will emerge from this? Product liability perhaps, though the fact that the cars have been recalled is likely to mean that there will not be that many incidents now and hence nothing to which such claims could attach. Product recall plainly, though one wonders just at what level Toyota have bought cover.

But we could also see some pretty large D&O claims, not least because, despite Toyoda-san’s words today (he said that they would now be actively seeking out potential defects), it’s all been too little and too late — Toyota seem to have been consistently on the back foot, responding to events rather than seeking them out. Directors will be asked why they did not do anything sooner, and held accountable for not having done so.

And the sheer number of different models affected (now almost more than those unaffected) makes it look as if all their cars are shoddily put together. The long-term effect on Toyota, insurance or not, is going to be catastrophic.