[April 18, 2006]

2ND LD: 'Punitive damages' against Mitsubishi Motors rejected+

(Japan Economic Newswire Via Thomson Dialog NewsEdge)YOKOMAHA, April 18_(Kyodo) _ (EDS: ADDING INFORMATION)

The Yokohama District Court on Tuesday rejected demands that Mitsubishi Motors Corp. pay 100 million yen in punitive damages over its failure to fix a defect in its large trailer truck model that led to the death of a woman in Yokohama in 2002.

The three-judge panel ordered Mitsubishi to pay 5.5 million yen to the plaintiff -- the mother of Shiho Okamoto, who died at age 29 after being struck by a wheel which came off the Mitsubishi trailer truck whose wheel hubs were defective.

A wheel hub is the central metal part of the wheel connecting it to the axle. Okamoto's two children were also injured in the accident.

Acting on a 165 million yen damages suit filed by Okamoto's mother, Yoko Masuda, 56, against Mitsubishi and the state, the court slashed the amount of damages awarded to the plaintiff to 5.5 million.

The court said the truck driver had already paid some 70 million yen to Okamoto's family and 2 million yen to the plaintiff. It also said Masuda is not Okamoto's legal beneficiary.

Dissatisfied with the decision, Masuda immediately filed an appeal with the Tokyo High Court.

Masuda described Tuesday's ruling as "abominable," telling a news conference that she has never heard what she deems as acceptable words of apology from Mitsubishi.

Presiding Judge Hiroshi Yamamoto said in the decision, "The imposition of punitive damages, which is aimed at punishing an offender, is not congruous to our country's legal system," noting that the purpose of compensation in a damages suit is to cover losses suffered.

The court also turned down the plaintiff's claims against the Japanese government, saying the government's lack of action to urge Mitsubishi to improve its business was unavoidable in view of the company's information cover-ups and the fact that wheel hubs are not covered in regular vehicle inspections.

Judge Hiroyuki Shibata read out the decision in the courtroom on behalf of Yamamoto, who had been moved to another court in a personnel reshuffle.

The ruling said the wheel which came off the Mitsubishi trailer hit the woman who was walking together with her two children on a sidewalk in Seya Ward, Yokohama, on Jan. 10, 2002.

Mitsubishi's failure to fix the defect in the vehicle for a long time despite being aware of it was "extremely heinous," the decision said.

Mitsubishi had feared a possible decline in its corporate image and further losses if it had recalled vehicles from the market, the ruling said. "The result was serious," it added.

The maker covered up information on its vehicle defects and made false reports to the government over a period of more than 20 years, it said.

In 2003, Mitsubishi spun off its truck division into Mitsubishi Fuso Truck & Bus Corp., which is currently an affiliate of DaimlerChrysler AG.

Following a series of accidents involving Mitsubishi-made trucks, Mitsubishi Fuso Truck & Bus announced a recall in March 2004 of about 112,000 large Mitsubishi vehicles due to defective wheel hubs that caused many accidents, including the fatal one in Yokohama.

The court said Mitsubishi Motors is obliged to pay compensation under the Civil Code and the Product Liability Law because the wheel hub attached to its trailer truck lacked sufficient strength.

Mitsubishi Motors President Osamu Masuko said in a statement that his company will accept the court decision, adding that Mitsubishi will do its utmost to prevent similar behavior and to regain public trust in it.

The plaintiff had demanded compensatory damages plus 100 million yen in punitive compensation from Mitsubishi Motors to make up for the sufferings caused by its heinous acts and with a view to preventing recurrences.

There is no Supreme Court precedent approving payment of punitive damages.

The plaintiff in the Yokohama case had also insisted that Mitsubishi Motors knew of the defect in the wheel hubs through a series of accidents involving its trucks but failed to recall them to replace defective parts.

Masuda also accused Mitsubishi of selling defective vehicles and condemned the government for failing to urge the truck maker to recall the products.

During court sessions, Mitsubishi admitted responsibility for failing to recall vehicles while the government argued that it could not recognize the trucks' defect before the 2002 accident.

In criminal trials, Mitsubishi and five of its former senior officials have been indicted on negligence charges over the 2002 truck accident in Yokohama. They have all pleaded not guilty.

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