Clauses Noted: 1, 2, 4, 10
Publication: The Sunday Times
Toyota (GB) Plc complained to the Press Complaints Commission through Lewis Silkin solicitors that articles headlined "Toyota accused of deceiving customers", "Car dealers accuse Toyota", and "‘If the customer doesn't make a complaint, don't fix the car'", published on 5 February 2012 by The Sunday Times, and "Toyota faces inquiry over ignoring faults", published on 12 February 2012 by The Sunday Times, were inaccurate and misleading in breach of Clauses 1 (Accuracy) and 2 (Opportunity to reply) of the Editors' Code of Practice. The complainant also considered that the newspaper had breached Clause 4 (Harassment) and Clause 10 (Clandestine devices and subterfuge) of the Code.
The complaint was not upheld.
The articles detailed the newspaper's investigation into an alleged discrepancy between a warranty policy and procedures manual issued to Toyota dealers and the information about service and warranty procedures issued by the company to customers. The newspaper claimed that the company operated a "secret" policy that required its dealers to turn a "blind eye" to faults with new cars that had not been reported by customers and did not relate to the safety and reliability of the car. Former technicians and dealers said such faults included oil and water pump leaks.
The complainant said it had engaged fully with the newspaper prior to publication and had refuted the allegations in full. Nonetheless, the newspaper had proceeded with publication of the inaccurate and distorted claims, causing serious reputational harm. The complainant had not been afforded a fair opportunity to reply following publication.
The complainant said the articles suggested wrongly that Toyota (GB) had intentionally deceived its customers by adopting a secret policy of requiring its dealers to ignore and conceal from its customers an array of serious faults in new vehicles, potentially endangering them and "ripping them off". There was no such secret policy: it did not impose confidentiality obligations on dealers in relation to its "Warranty Policy and Procedures Manual", which it distributed widely to authorised outlets. The two documents referred to in the coverage were worded differently because they were intended for different audiences, but they were fully aligned. The policy for dealers ensured that warranty claims were handled honestly and appropriately; auditing dealers carrying out this work was a commercial necessity.
The complainant said that the articles - which cited examples of faults which the newspaper's sources claimed would remain unrepaired under the policy, such as oil leaks, rusty brake discs and faulty wing mirrors - implied wrongly that dangerous faults were ignored by technicians. It disputed a number of the examples, addressing each separately. There was no evidence that any customer had been put at risk as a result of the alleged "secret" policy, which was comparable with, and in some respects more advantageous than, those of its competitors. In addition to addressing any customer-reported faults, a dealer would undertake a full inspection of the car and any safety- or reliability-related fault not reported by the customer would be recorded on a Visual Safety Report (VSR), while non-safety- or reliability-related faults would be recorded on a Job Card. Faults which fell within the latter category could not be automatically repaired, as they might have been caused by wear and tear, which would not be covered by the warranty. However, a technician would be required to show the completed Job Card to the customer and explain the faults recorded on it. The customer could then ask the dealer to fix these cosmetic faults, under warranty if appropriate. This process had been explained to the newspaper before publication. The claims against it had been published on the newspaper's front page; its responses had been published less prominently.
The complainant said the articles had also suggested inaccurately that Toyota had suppressed concerns raised by dealers over the policy. Claims about a 2009 meeting at which concerns had been raised about potential safety issues were misleading; only one dealer had expressed these views, contrary to the impression given in the article. In any case, these allegations were three years old and were not representative of the current situation. The article failed to make this clear.
The newspaper had reported that Motor Codes, the motoring industry regulator, had opened an investigation into the issues raised by the newspaper. Motor Codes had subsequently ruled that there had been no breach of the New Car Code of Practice; this had not been reported by the newspaper.
The complainant also complained under Clause 4 (Harassment) and Clause 10 (Clandestine devices and subterfuge). It provided witness statements from several Toyota dealers and employees of dealers who had been approached by the newspaper for the article. It said reporters had "door-stepped" dealers at their homes without prior warning; had been brusque and persistent in their questions; had been misleading in their questioning; and had made use of personal telephone numbers and a home address provided by a source to contact dealers and former employees.
The newspaper said that a copy of the company's "Warranty Policy and Procedures Manual", which was marked as "updated" in 2008, made clear that in addition to all safety and reliability problems, "warranty should address only those issues raised directly by a customer". This document was not available to customers. Service and warranty information provided to customers said: "this warranty covers any defect (excluding corrosion of functional parts) that is attributable to a manufacturing or assembly fault under normal use [subject to mileage and time limits]... Your Official Toyota Centre or Official Toyota Service Outlet will carry out any repairs covered under these warranties at no charge for parts or labour." A list of items "not covered by the Toyota warranty" made no reference to unreported defects. The article had accurately reported this discrepancy. There was a public interest in revealing it and in reporting the concerns of some dealers that the unrepaired defects might become more serious. The coverage had made clear repeatedly that dealers were instructed to fix faults relating to safety and reliability.
The newspaper had been provided with a copy of the manual that stated on its cover page: "This manual is for the confidential use of authorised Toyota dealers only". It was not inaccurate to call this document "secret". In any case, customers could not have access to this manual, which was stored on a secure part of the company's intranet site. It was available exclusively to dealers.
The newspaper did not agree that the complainant had demonstrated that technicians were required to report cosmetic faults to the customer or show them the completed Job Card. Such faults were recorded on the Job Card so the company could ascertain in an audit whether the dealer had repaired unreported non-safety faults. This was supported by the instructions within the manual for dealers.
The newspaper said that, as it had accurately reported, one eyewitness claimed that at a meeting in 2009 the Toyota (GB) managing director had stopped a dealer from voicing concern that the warranty policy could compromise safety. It had published the managing director's response that he could not remember the incident.
Its investigation was not intended to be a comparative study of industry practices; it had accurately reported the responses of other manufacturers that their warranties covered all manufacturing faults found by their technicians. The newspaper said that Motor Codes had informed it at the time of publication that an investigation into the claims was likely. Following the complaint to the PCC, the newspaper had, on 26 April, updated the article online and, on 1 July, published a follow-up in print to make clear that Motor Codes had found the customer warranty was not in breach of the News Car Code of Practice and would not be referring the matter to the Independent Compliance Assessment Panel. The newspaper said the complainant had been given ample opportunity to respond to the claims before publication, and it had been unable to demonstrate that the article was inaccurate, so no right of reply was merited.
The newspaper rejected the complaints of harassment and subterfuge. Its reporters had identified themselves as such; a single visit to a home address by a reporter who had behaved appropriately was not harassment. It rejected claims that its reporter had provided a false surname or given a receptionist the misleading impression that the managing director of Toyota (GB) had suggested a particular director speak to The Sunday Times. Rather, the reporter had informed the receptionist that the managing director had mentioned the director in question had been present at a key meeting and that it might be helpful for her to speak to him. The newspaper maintained that its reporter had made the approach in good faith.
The complainant said that it had never sought to enforce any confidentiality obligation against any dealer or to restrict knowledge of the manual's content to customers. In any case, the front page of the manual provided by the newspaper was from an old version of the manual, last issued in December 2001. The current version, which was in force at all material times, did not carry any confidentiality notice.
The newspaper had reported concerns expressed by technicians and dealers associated with Toyota (GB) that the company had issued a manual to dealers requiring that they only fix faults under warranty which either had been reported by customers or affected the safety and reliability of the car, but did not inform customers of this policy. While the significance of this policy and the detail of how it was interpreted by dealers and by the company were matters of significant dispute, this discrepancy between the written information provided to dealers and customers was established by the documentation provided to the Commission.
Clause 1 (Accuracy) of the Editors' Code of Practice sets out that "the press must take care not to publish inaccurate, misleading or distorted information, including pictures" and that "a significant inaccuracy, misleading statement or distortion once recognised must be corrected, promptly and with due prominence, and - where appropriate - an apology published".
In the view of the Commission, the newspaper had taken appropriate care in presenting the coverage as a whole to make clear that it was reporting claims of former dealers and technicians. It had emphasised - including in the front-page headline - that it was reporting "accusations" against the company, and it had published a standalone article under the heading "Toyota say there is no problem", summarising the complainant's position, including its firm stance that it requires dealers to fix all safety- and reliability-related faults in vehicles under warranty. The Commission considered the matter against that background.
The newspaper published claims by one former dealer that the dealers and the complainant "did not agree on" what constituted a safety-related issue and reported claims by former dealers and technicians that oil and water pump leaks, faulty shock absorbers, heavy clutches, clicking steering columns, corroded alloy wheels, rusty brake discs, faulty wing mirrors and engine oil blockages might not be fixed under the policy set out in the dealers' manual. Some of these concerns had evidently been raised in a meeting between the complainant and dealers in 2009, as the minutes of the meeting reflected. The complainant said that some of these examples would always be fixed under the policy as safety issues, and that, following a full investigation into one example - the clicking steering column in the Yaris model - it had determined that it was not dangerous. In circumstances where such a conflict of evidence existed between the parties, the Commission considered that the newspaper was entitled to report the claims of the dealers, provided it set out the complainant's position. It had done so adequately; there was no breach of Clause 1 (Accuracy) of the Code on this point.
The complainant denied that faults were "ignored" due to the policy. It said that technicians were obliged to make customers aware of any cosmetic faults identified during the check and show them the completed Job Card. However, correspondence showed that prior to publication the complainant had stated that technicians were "at liberty" to inform customers of these cosmetic faults. Further, it did not appear that the manual supplied to dealers expressly required technicians to present the completed Job Card (which would include "cosmetic" faults unreported by the customer) to the customer. The newspaper had published the complainant's position, as set out at the time of publication, that technicians were free to inform customers of these faults. That being so, the Commission could not establish a significant inaccuracy or misleading statement such that a correction or clarification would be required under the terms of Clause 1 (ii).
The complainant denied that the policy was "secret". It accepted that the document had previously carried a confidentiality clause, but said this had last been included in a 2001 edition of the document. The newspaper stated that the version of the manual provided to it had been downloaded from the secure intranet site after 2008; it denied that the complainant had demonstrated that the confidentiality clause was now omitted. The Commission could not reconcile these positions. Nonetheless, given that the policy regarding the warranty authorisation was not included in the customer's warranty handbook, and that the dealer's manual was not readily available to members of the public, the Commission did not agree that it was misleading to refer to it as "secret". The article had made clear that the manual was distributed to all dealers; readers would have been fully aware of the nature of the "secrecy" alluded to by the newspaper. There was no breach of Clause 1 on this point.
The newspaper had published extracts from the minutes of the 2009 meeting. While the text was not disputed, the complainant said that the concerns quoted reflected the position of one dealer rather than all the dealers within the "zone". The minutes did present the concern as being that of the "zone" rather than any particular individual. However, the coverage made clear the position of the complainant that it was likely to have represented the view of just one dealer. Similarly, the articles noted that the managing director did not recall requesting a dealer to "stop" expressing his concern and thought that he was out of the room during the exchange. The newspaper had made the complainant's position sufficiently clear.
The complainant said that the concerns reported by the newspaper were out of date and therefore did not give an accurate portrayal of the current situation. The Commission noted that the coverage had made clear the timing of both the 2009 meeting and an audit on the issue, which had taken place in 2008. The newspaper's sources appeared to claim that their concerns over the warranty were recent or ongoing; one dealer who had spoken to the newspaper claimed that concerns still existed last summer. The article had quoted the company's position that "its dealers are now happy and the matter has not been raised since [the 2009 meeting]". There was no breach of Clause 1 on this point.
The complainant was concerned that the newspaper had failed to update the article reporting that it would face an investigation by Motor Codes. The newspaper had updated the online article after the regulator had communicated its decision to the complainant and had subsequently published an update to the story in its print edition. While the latter action was somewhat delayed, the newspaper had fulfilled its obligation under Clause 1 of the Code to ensure that readers were not misled.
The Commission then turned to the complaint under Clause 4 (Harassment). The complainant said that the reporters had approached several of its employees at their home addresses or on their personal telephones, without warning, and that the tone of one reporter had been aggressive and rude. The Editors' Code does not require journalists to give forewarning of an intention to approach an individual as part of the newsgathering process. The Commission did not agree that the use of a telephone number, or the visit to a home address, provided to a reporter by an acquaintance of the individual, amounted to intimidation or harassment. While one witness statement alleged that a relative of a dealer had had "some difficulty in persuading [the reporter] to leave", this was disputed by the newspaper; other evidence from those who had spoken to the reporters suggested they had been polite. From the material before it, the Commission could not establish a breach of Clause 4.
Clause 10 (Clandestine devices and subterfuge) says that "engaging in misrepresentation or subterfuge can generally be justified only in the public interest and then only when material cannot be obtained by other means". The complaint under Clause 10 related to allegations that a reporter had given a false surname to a receptionist and the misleading impression that the company's managing director had suggested that a particular executive should speak to the newspaper. The two parties had provided conflicting evidence on this point, which the Commission was not in a position to reconcile, but it was accepted that the reporter had clearly identified herself as a representative of the newspaper. From the evidence before it, the Commission was not able to establish a breach of Clause 10.
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