Toyota Australia Agrees to Record $750 Million DPF Class Action Settlement

Toyota Australia has committed to a $750 million settlement to resolve two long-running class action lawsuits regarding defective diesel particulate filters (DPFs) across its HiLux, LandCruiser Prado, and Fortuner ranges.

The agreement, which is positioned as the largest class action settlement in Australian history, remains subject to final approval by the Federal Court at a hearing scheduled for November 20, 2026.

Affected Vehicles and the Defect

The legal proceedings encompass 264,170 vehicles built and acquired in Australia between October 1, 2015, and April 23, 2020.

The scope of the defect specifically targets models powered by Toyota's 2.4-litre (2GD-FTV) and 2.8-litre (1GD-FTV) turbo-diesel four-cylinder engines. During the litigation, the Federal Court determined that the DPF systems fitted to these vehicles were defective and prone to blockages. These blockages resulted in excessive foul-smelling white smoke, elevated fuel consumption, and the need for repeated unscheduled servicing and repairs. The court also found that Toyota engaged in misleading or deceptive conduct during the marketing and sale of the affected vehicles.

To mitigate the issue, Toyota introduced a manual DPF regeneration switch as standard from June 2018, followed by a permanent hardware and software repair developed in May 2020, which continues to be offered to owners free of charge.

Class Action Structure and Litigation Funder Deductions

The $750 million settlement resolves both the original 'Williams' class action, which commenced in 2019 for buyers within the primary 2015–2020 period, and the subsequent 'Taylor' class action. The Taylor action, launched in July 2025, covers private second-hand buyers who purchased affected vehicles between April 24, 2020, and July 31, 2025, and still retain ownership.

The final compensation amounts distributed to owners will be significantly reduced by the costs of the litigation funder, Balance Legal Capital. The firm has claimed 32.5 per cent of the total settlement—equating to a potential return of over $243 million—alongside approximately $35 million in expenditure. The firm justified these deductions in the settlement documentation by noting it bore the financial risk of paying Toyota's defense costs had the class action been unsuccessful.

Prior to the settlement agreement, the assessment of the vehicles' reduction in value experienced a lengthy appeals process. The Federal Court initially assessed the reduction at 17.5 per cent of the average retail price, which was reduced to 10 per cent on appeal in 2023, before the High Court rejected the reduction in November 2024 and returned the matter to the Federal Court for reassessment.

Estimated Owner Compensation Payouts

Following the deductions claimed by Balance Legal Capital, eligible owners who formally registered for the class action are projected to receive tiered compensation based on their acquisition type and current ownership status. Unregistered owners are no longer eligible to join the settlement and will not receive payouts.

(Note: Without the 32.5 per cent funder deduction, compensation for original owners who retained their vehicles would have ranged between $9,600 and $11,600.)

A Toyota Australia spokesperson issued an apology for the inconvenience experienced by customers, noting the brand has spent 70 years building trust in the Australian market. "We remain committed to assisting any impacted customers and to providing a free-of-charge remedy that has been available since 2020," the spokesperson stated.