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Some thought — mea culpa, we were among them — that the “Cablegate” class-action lawsuit against Toyota was started far too early. But some will say that, with this class-action ending in one of the most generous settlements ever seen in the Canadian auto industry, such a happy ending is precisely because a group of Quebecers brought pressure — and international attention — to the problem.
Whatever the case, according to the Automobile Protection Association (APA) — which has been defending Canadian motorists for half a century — the agreement just approved by Quebec’s highest court is a “very good settlement, with clear parameters and significant financial value,” per its president, George Iny. That’s a vindication for the organization’s decision to call on Montreal firm Adams Avocat to bring a class-action. It also brings to an end an issue that was highly publicized in Quebec through this Facebook page, with nearly 7,000 members.
Click here to read the Quebec (French-language) version of this story
The problem it solves is that, on certain Toyota and Lexus hybrid vehicles from model years 2019 to 2022, the AWD system’s traction-motor-cable high-voltage subfloor wires presented a design defect (the plaintiffs claim) that leaves the connector poorly protected from winter water and salt spray. This could cause premature corrosion and, in some cases, failure of the hybrid system. Indeed, after a sufficient number of warning indicators were illuminated, the vehicle might not even start.
Iny reports that it’s mostly Toyota RAV4s (2019-2022) that are affected, and that it’s especially prevalent in northern regions where salt is spread in winter. The proof: “In the United States to date, apart from Maine and the Midwest states, the problem has not arisen,” the APA president told Driving.ca.
The trouble is that the warranty covering this part (photo below) was initially only for three years and 60,000 km. Since then, the infamous cable has been modified four times and, for the vehicles covered by the agreement, a warranty enhancement program now extends the protection to eight years and 160,000 km. It is worth noting that as of yet, for 2023 and 2024 models, the hybrid cable is still covered by the shorter warranty.
A settlement that benefits all of Canada
The request for a class-action filed by Fredy Adams on May 19, 2022 and featuring consumer Constantin Sultana as the applicant-plaintiff will not have to be debated before Quebec’s highest court. Indeed, at the approval hearing held in 2023, and in view of Toyota’s “positive attitude” towards the problem, the Court suggested the two parties come to an agreement.
The negotiations, which lasted almost a year, notably enabled the settlement to become a national solution — not one just for owners in Quebec. “When I learned that there was no other group of its kind in the country, I asked to expand the class to include Canadian consumers,” explained Adams, in a telephone interview with Driving.ca. “I went by the principle that if Toyota was willing to settle in Quebec, why not for the rest of Canada?”
Another example of Toyota’s willingness to take responsibility for the problem is that the entire process of filing, authorizing, and ratifying this class-action took barely two years. In Quebec, class-actions last an average of seven years.
$40-million “uncommon” settlement
In mid-September, the Honorable Sylvain Lussier of the Quebec Superior Court approved a final resolution of the case. In approving the settlement agreement, the judge said the following: “Class members obtain full satisfaction of their principal claims. Such a result is uncommon.” He also emphasized the simplicity of the process, saying the result was “quick and unconditional.”
Adams agreed, noting that “an agreement of this nature is rare.” Indeed, the plaintiff’s lawyer told us, “We got everything we wanted, and even more than what was initially asked. We asked for the same warranty for the hybrid cable system. We got it. We asked for reimbursement of the repairs that members had to pay for, including rental and towing costs. We got that, too.”
Nearly 100,000 Toyotas and Lexuses involved
What initially targeted only Toyota RAV4 Hybrids in Quebec has now been extended to a total of seven Toyota and Lexus hybrid models — and to the rest of Canada. According to the statistics brought in evidence before the court, the settlement concerns 96,274 Toyota and Lexus vehicles across the country, nearly a quarter of which (21,084) are registered in Quebec.
Toyota’s Canadian division estimates that it will spend $40 million to repair all affected vehicles in the country (including the rental of courtesy vehicles when necessary). As of last July, Toyota had already spent more than a third ($16 million) of this sum.
The APA still has two regrets
For George Iny, this agreement between the plaintiffs and Toyota is “a very good settlement, firstly because it benefits all Canadians by settling future breakdowns in advance,” but also “because it helped trigger similar warranty enhancement programs in the U.S.”
That said, the APA president has two regrets. One is that the price of the original replacement part remains very high. Iny reports that “repair [of the faulty cable] at a dealership still costs between $5,500 and $7,500, including about $1,500 labour.” That’s fine as long as Toyota is footing the bill, but that won’t be the case forever. “We feel that Toyota should have reduced the price of the part to less than $1,000, so that the repair, after the extended warranty expires, would be in the $2,000 to $2,500 range. After all, it’s an orange extension cord. There’s no reason for it to cost that much!”
Iny also noted that Toyota has not yet provided a kit to improve the protection of the part — “for example an additional connector sheath, which worried owners could have made installed for less than an hour’s labour.”
That said, customers should be wary of aftermarket solutions. At least one company is supplying a cable protector, but it costs almost $400 and is of questionable use. And it’s reported that some independent garages are adding some dielectric grease to the existing connector. While that will indeed protect the electrical terminals, most protectants are designed for 12V applications, not the high-voltage systems used in hybrids. Whether they will stand up to the extra strain is also unproven.
The “CableGate” settlement in nine points
If you happen to be one of those 96,274 Toyota or Lexus owners affected by this issue, here’s everything you need to know about this Canada-wide agreement.
Owners offered 100% coverage
With its warranty enhancement program, Toyota has extended the coverage of the hybrid cable system to eight years and 160,000 km (whichever comes first) for several vehicle models (this warranty applies automatically).
Vehicles covered by the agreement:
- Toyota Highlander Hybrid (2020-2022)
- Toyota RAV4 Hybrid (2019-2022)
- Toyota RAV4 Prime (2021-2022)
- Toyota Venza Hybrid (2021-2022)
- Toyota Sienna Hybrid (2021-2022)
- Lexus NX350h (2022)
- Lexus NX450h+ (2022)
Please note that Toyota Prius cars (2019-2022) are not included, as they use a different hybrid powertrain.
Owners offered free repairs under the extended warranty
Vehicles affected by the problem that have not already been repaired will be repaired free of charge by dealers, at the manufacturer’s expense, within the limits of the extended warranty.
Owners who have already paid for repairs offered refunds
Consumers who have already had the affected cable repaired will receive a full refund for what they have already paid. This includes, if applicable, the rental of a courtesy car and towing costs.
We got everything we wanted, and even more than what was initially asked. We asked for the same warranty for the hybrid cable system. We got it. We asked for reimbursement of the repairs that members had to pay for, including rental and towing costs. We got that, too.
Fredy Adams, partner, Adams Avocat law firm
Owners who have previously signed releases also eligible
Unexpectedly, even customers who have previously signed a release with Toyota, absolving the manufacturer of further responsibility in exchange for a total or partial contribution to the cost of the repair, can now request reimbursement of what they have paid. “This is unprecedented,” says Adams. “It’s rare, very rare that a company agrees to reimburse when a release has already been signed.”
Owners who no longer have the vehicle still eligible
Those who have paid for inspection or towing fees and who have not had their vehicle repaired but no longer own it, are eligible for reimbursement (upon presentation of invoices).
Owners’ legal fees will be paid by Toyota
Toyota has agreed to pay the plaintiffs’ legal fees, “without any participation by the members of the group.” In other words, the $700,000 in legal fees to be paid to Adams Avocat will not be assumed by the consumers.
Toyota settles without liability
The settlement reached between the parties is without any admission of liability on the part of Toyota or its subsidiaries.
No expiration date on the period for filing the claim
Beyond the fact that Toyota and Lexus hybrid vehicles presenting the defective electric component will be repaired free of charge and within the limits (96 months and 160,000km) of the extended warranty, the period for filing a claim has no expiration date.
Numbers to call for information
If you are a Toyota customer and encounter any difficulty at your dealership regarding the application of the warranty enhanced program, you are invited to contact Toyota Customer Service at 1-888-869-6828. For Lexus customers, the phone number is 1-800-26-LEXUS (1-800-265-3987).
What about newer Toyota and Lexus hybrids?
Some consumers have asked the agreement include Toyota and Lexus hybrid vehicles for model years 2023 and 2024. The magistrate did not grant this request, explaining that newer vehicles were not part of the original request. He did, however, specify in his ruling that these consumers “remain free to bring a new class-action.”
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