Independent referee’s report
On 23 October 2020, the Federal Court of Australia adopted an independent referee’s report which concludes that the Diesel Particulate Filter System (DPF System) in all Toyota Hilux, Prado and Fortuner diesel vehicles sold in Australia between October 2015 and April 2020 was defective.
These findings are of great significance to the owners of the 250,000 affected vehicles subject of the class action, and an important step towards obtaining compensation for group members who were sold defective vehicles by Toyota.
The independent referee found that the DPF System was not designed to work effectively during normal use of the vehicles in the Australian market, and the DPF System was designed with both mechanical and software defects.
The independent referee also found that countermeasures attempted by Toyota during the relevant period were ineffective and, in some cases, made the problem worse.
A copy of the independent referee’s report can be found here.
Despite these problems, Toyota continues to market the Hilux as “unbreakable” and the Prado as being “built to take on Australia’s toughest terrain”.
A short summary of the key findings from the referee’s report can be found below.
Summary of the independent referee’s report
What is the DPF System?
The DPF is a filter which is intended to capture harmful pollutants, such as carbon monoxide, nitrogen oxides and diesel particulate matter, which are emitted by diesel engines. These pollutants must be continually removed from the DPF for it to remain effective and the DPF System uses a process called “regeneration” to achieve this.
What are the key defects and defect consequences found by the independent referee?
The key defects and defect consequences found by the independent referee are that regeneration of the DPF System fails to remove sufficient particulate matter from the DPF to prevent it from becoming blocked and ceasing to function effectively. This causes:
- damage to parts of the DPF System;
- excessive, foul-smelling white smoke (unburned diesel fuel) to be emitted from the vehicles;
- vehicles to require unusual or abnormal maintenance, such as repeated, unscheduled inspections, services and repairs.
Toyota claims that the countermeasures introduced in mid-2020 fix the issue. Is this correct?
The independent referee did not determine that countermeasures introduced by Toyota in mid-2020 are effective. Rather, the referee found that they were designed to eliminate the core defect and appeared to remedy the defect.
It was submitted on behalf of the applicant that it is too early to tell whether these countermeasures provide a long-term fix to the defects. The independent referee found that other countermeasures attempted by Toyota were ineffective and, in some cases, made the problem worse.
Even if the 2020 countermeasures do prove to be effective, group members in the class action will still be able to claim damages. Toyota sold defective vehicles for 5 years which continue to cause many consumers problems. Consumers did not receive what they paid for and have suffered the consequences ever since.
Did the independent referee find that fuel consumption is impacted?
The independent referee did not find that the defects do not increase fuel consumption. Rather, the effect of the independent referee’s findings was that the defects identified would have an impact on fuel efficiency, but he did not have the information needed to quantify the impact and reach a conclusion.
It was submitted on behalf of the applicant to the Court that the defects do increase fuel consumption. Even a ‘marginal’ impact on fuel efficiency over the course of the life of a vehicle and across a class of over 250,000 affected vehicles will amount to significant damages having been suffered by the class. For example, if each group member spent an extra $200 on fuel across the life of the vehicle, across 250,000 vehicles, that amounts to the class having incurred an extra $50 million in fuel costs alone.
At the hearing on 23 October 2020, the Court indicated that the date by which a mediation between the parties is to take place will be set at a hearing in December.
Further information about the case will be provided as the case progresses.