New 'dieselgate' blow for VW as German court backs damages claims

File picture: Jens Meyer / Reuters.

File picture: Jens Meyer / Reuters.

Published May 25, 2020

Share

Karlsruhe, Germany - Volkswagen

must pay compensation to owners of vehicles with

rigged diesel engines in Germany, a court ruled on Monday,

dealing a fresh blow to the automaker almost five years after

its emissions scandal erupted.

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 admitted in September 2015 to cheating emissions

tests on diesel engines, a scandal which has already cost it

more than 30 billion euros (R576bn) in regulatory fines and

vehicle refits, mostly in the United States.

US authorities banned the affected cars after the cheat

software was discovered, triggering claims for compensation.

But in Europe vehicles remained on the roads, leading

Volkswagen to argue compensation claims there were without

merit. European authorities instead forced the company to update

its engine control software and fined it for fraud and

administrative lapses.

Volkswagen said on Monday it would work urgently with

motorists on an agreement that would see them hold on to the

vehicles for a one-off compensation payment.

It did not give an estimate of how much the ruling by the

German federal court, the Bundesgerichtshof (BGH), might cost

it.

The BGH's

presiding judge had signalled earlier this month he saw grounds

for compensation.

Costs mount

"The verdict by the BGH draws a final line. It creates

clarity on the BGH's views on the underlying questions in the

diesel proceedings for most of the 60 000 cases still pending,"

Volkswagen said.

A lower court in the city of Koblenz had previously ruled

the owner of a VW Sharan minivan had suffered pre-meditated

damage, entitling him to reimbursement minus a discount for the

mileage the motorist had already benefited from.

The court at the time said he should be awarded 25 600 euros (R490 000) for the used-car purchase he made for 31 500 euros in 2014.

"We have in principle confirmed the verdict from the Koblenz

upper regional court," said BGH presiding federal judge Stephan

Seiters.

Volkswagen had petitioned for the ruling to be quashed

altogether by the higher court, while the plaintiff had appealed

to have the deduction removed.

A Volkswagen spokesman said that outside Germany, more than

100 000 claims for damages were still pending, of which 90 000

cases were in Britain.

The carmaker also said it had paid out a total of 750

million euros to more than 200 000 separate claimants in Germany

who had opted against individual claims and instead joined a

class action lawsuit brought by a German consumer group.

The carmaker said last month it would set aside a total of

830 million for that deal.

In a separate court, Volkswagen agreed last week to pay 9

million euros to end proceedings against its chairman and chief

executive, who were accused of withholding market-moving

information before the emissions scandal came to light.

Reuters

Related Topics: