In January 2009, carmaker giant Toyota has announced a global recall of more than 1.35 million cars to fix the defective seatbelts, faulty exhaust-gas recirculation (EGR) pipes, or both.

According to company officials, the seatbelts found in Vitz, Ractis, and Belta models (all manufactured from 2005 to 2008) may ignite after a high-impact collision. In Japan, there has already been an incident of a seatbelt catching fire.

Meanwhile, some Toyota models also have EGR pipes (used in engine to reduce carbon emission and to make it more fuel-efficient) that may crack due to its faulty design. According to experts, the defective pipes can cause exhaust gases to leak.

The Cost of Defective Products

Defective products are not only dangerous to consumers; it can also cause economic damages to manufacturers. And while Toyota declined to reveal how much they spent after announcing the massive recall and correcting the faulty designs found in its cars, anyone car surmise that it could amount to hundreds of millions of dollars. However, this is still considered paltry compared to civil penalties the manufacturer can face if it did not take immediate action to correct the defective auto parts.

Meanwhile, correcting defective parts also has an advantage on the part of a manufacturer: it will prove to consumers that it is responsible in ensuring their safety.

Types of liability

Under auto products liability claims, manufacturers should pay people whose injuries are caused by its cars’ defective parts and faulty designs.

There are three basic types of product liability claims with each example for better understanding:

1. Manufacturing defect – a part of a vehicle has a defect which may cause serious or even fatal accident. For example, there is a leak in fill pipe that goes to the gas tank. If this happens, the smell of gas will reach inside the car that is dangerous to the drivers and passengers.

2. Design defect – a vehicle’s part has a faulty design that may cause serious or fatal accidents, even if it is made of sturdy material. For example, Chrysler’s Gen 3 seatbelt has a flawed design that may automatically unlatch during a high-impact collision.

According to reports, three people allegedly died in the US after their Gen 3 seatbelts accidentally unlatched during a collision.

3. Failure to warn – a car manufacturer has to provide proper labeling on its vehicle’s part. To prevent liability, companies usually provide how-to-use information on certain vehicle’s parts and post warning signs on its windows saying "Do not Stick Heads or Limbs".

Victim’s claims

Victims of auto part defects can seek claims from the manufacturer. According to lawyers, monetary compensation includes economic damages (e.g. hospital expenses, loss of wage) and non-economic damages (e.g. pain and suffering).

However, punitive damages may be awarded to victims if the car manufacturer’s act is wanton and malicious. Usually this monetary compensation, which is used to deter the company from repeating again its mistakes, is more than the real cost of damages.