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From Products Liability Law Daily, August 8, 2014

Hyundai to pay $17.35 million in brake defect case

By Joe Bichl

Hyundai has agreed to pay a $17.35 million civil penalty and comply with governmental oversight requirements as a result of its failure to report in a timely manner a safety-related defect affecting model year 2009-2012 Hyundai Genesis vehicles, the National Highway Traffic Safety Administration announced. The defect involves corrosion in the brake system that can result in reduced braking effectiveness and increase the risk of a crash, NHTSA reported.

NHTSA indicated that the automaker had been aware in 2012 that brake fluids used in the MY 2009-2012 Hyundai Genesis did not sufficiently inhibit corrosion in certain components of the vehicle’s brake system. Rather than issue a recall to repair the defect, Hyundai instructed dealers to change the brake fluid in the affected vehicles without explaining the consequences of failing to change the brake fluid. NHTSA determined that Hyundai also failed to notify Genesis owners of the potential safety consequences. As a result of NHTSA’s investigation, Hyundai issued a recall of the vehicles in October 2013 (NHTSA Recall Notice, No. 13V489, October 29, 2013).

There have been no reported fatalities relating to the brake system troubles. However, NHTSA said that six consumers reported collisions, including two reports of injuries. As of January 14, 2014, Hyundai had received 87 consumer complaints concerning Genesis vehicles, with the majority of the complaints indicating braking difficulties.

As part of the Consent Order, Hyundai agreed to make improvements to its processes for identifying, reporting, and communicating safety-related defects in a timely manner, including the creation of a U.S. Technical Committee to review and make decisions regarding potential Hyundai-specific safety recalls. According to the Order, Hyundai will be responsible for responding to safety concerns in a timely manner based on the Technical Committee's recommendations.

"Federal law requires automakers to report safety-related defects to NHTSA within five days, and neither NHTSA nor the American public will accept anything less," said NHTSA Acting Administrator David Friedman in a news release. "Hyundai failed to act to protect their customers and others that were harmed in an accident, and must change the way they deal with all safety related defects."

Companies: Hyundai Motor America

MainStory: TopStory NHTSANewsStory SettlementAgreementsNews MotorVehiclesNews

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