January 29, 2010 

Written By Attorney: Patrick C. Timoney

This article is an interpretation of current law and is offered for informational purposes only. This material is not legal advice and should not be construed or used as a substitute for the advice of an attorney.

Last week, Toyota recalled 2.3 million vehicles due to defective acceleration issues. Nelson Levine de Luca & Horst is working with automobile experts and insurance carriers to address various recovery options. Insurance carriers and fleet owners should be aware of the following issues.

1) Not Just "Sticky Pedals"

Potential claims may not be limited to those where a "sticky pedal" is reported or observed. Initially, it was assumed that the source of the problem was limited to a mechanical condition of the car's accelerator pedal that caused it to become "sticky." However, some of the vehicles that have experienced a sudden acceleration problem have not been found to have any mechanical problem of "stickiness" in the accelerator itself. Current expert analysis points to other potential sources for the problem relating to the vehicle's electrical or computer systems that connect the accelerator pedal to the motor.

2) Not Just Recalled Models

Potential claims may not be limited to those models that are currently identified by the manufacturer as being subject to the recall, as other Toyota models have been manufactured with similar designs. The list of vehicles that are potentially involved continues to grow as the manufacturer and other experts who are examining the problem consider multiple potential sources.

3) Evidence Preservation

Wherever possible, carriers and fleet owners should take prompt action to preserve the vehicle involved for inspection by knowledgeable experts and by Toyota. Although it is preferable to have the vehicle, if a prior claim is identified where the vehicle was not retained, a potential subrogation or contribution claim may still be viable in certain jurisdictions based upon a design defect theory.

4) Extension of Statutes of Limitations

For some contribution actions, the period within which a carrier is permitted to seek a recovery from the vehicle manufacturer or dealer may not begin to run until the date that the carrier has actually made payment on the claim, and not on the date of the loss itself.

5) Potential Recovery Opportunities

Recovery opportunities for carriers extend beyond property damage or workers compensation subrogation claims and could also include contribution claims for payments made by carriers on liability claims, as well as subrogation claims arising from first party auto claims, or med pay claims. Carriers should be undertaking a review of their losses in each of these coverage areas and educating their claim force to be sensitive to these wider issues going forward.

For the latest information on the status of these efforts, or if you have specific questions about a particular loss, please call or email Patrick Timoney, at Nelson Levine de Luca & Horst at (215) 358-5142 or ptimoney@nldhlaw.com.