A German court has ruled that Volkswagen is liable for compensation payments to potentially 60,000 owners of vehicles fitted with illegal emission-defeating software, five years after the ‘dieselgate’ scandal first rose to prominence.
The German Federal Court of Justice ruled on a case put forward by the plaintiff, Herbert Gilbert, stating that Volkswagen must partially reimburse Mr Gilbert for his vehicle – taking into account depreciation. The case sets an important legal precedent for more than 60,000 other vehicle owners in Germany in the same situation as Mr Gilbert, who will likely be eligible for a one-off compensation payment from Volkswagen.
According to a report from Reuters, “the ruling by Germany’s highest court for civil disputes, which will allow owners to return vehicles for a partial refund of the purchase price, serves as a template for about 60,000 lawsuits that are still pending with lower German courts.”
Volkswagen has previously settled a class action lawsuit put forward by 235,000 German car owners that were misled to believe their vehicle was less polluting than it actually was. A spokesperson for the auto manufacturer confirmed that there are an additional 100,000 claims filed for damages against it from owners, 90,000 of which are based in the UK.
A recent ruling from a High Court judge confirmed that the software installed in diesel-powered Volkswagen, Audi, SEAT and Skoda – all of which are owned by VW – constituted a defeat device, which gives owners a steady legal footing to continue their pursuit of compensation payments.
In total, Volkswagen has paid more than AUD $50 billion in fines, buybacks and compensation payments to those impacted by the scandal over the past five years for the 11 million vehicles that were fitted with a defeat device.
Judging by Volkswagen’s response, owners of impacted vehicles look set to receive a one-off payment for this troubles, with the manufacturer saying in a statement that “for the majority of the 60,000 pending cases, this ruling provides clarity as to how the [Federal Court of Justice] assesses essential questions in the German diesel proceedings.”
It’s not yet known how much each owner will receive as a result of the court filing.
“Volkswagen is now seeking to bring these proceedings to a prompt conclusion in agreement with the plaintiffs. We will therefore approach the plaintiffs with the adequate settlement proposals.”
In the aftermath of the dieselgate scandal, a number of Volkswagen models were banned from international markets, after the manufacturer was found guilty of installing an emission-defeating device and software. The software was able to detect when it was under testing conditions, and subsequently triggered a device in the engine bay that would reduce the rate of noxious gases coming from the tailpipe.
Volkswagen engine bay
This method was used to fool international regulators as to a Volkswagen diesel’s economy and pollution figures, with the company even winning awards for its TDI-branded engines that were marketed to the public as an environmentally friendly diesel option.
Volkswagen’s diesel variants were banned by the U.S. environmental protection agency, however, they remained on the road in a number of key markets like Europe in spite of wide-scale buyback programs. The manufacturer argued that considering this fact, further compensation payments were “without merit,” according to a Retuers report. “European authorities forced the company to update its engine control software and fined it for fraud and administrative lapses.”
Volkswagen has said that it has paid more than AUD $1.2 billion to the 200,000 claims in Germany that took part in a joint class action lawsuit put forward by a German consumer protection group.
In another court, Volkswagen agreed on a settlement worth AUD $15 million involving accusations its chairman and chief executives were knowingly hiding information on the emissions scandal before the news went public.
