2015: Volkswagen admit to fitting some of their diesel cars with a ‘defeat device’, aimed squarely at cheating the emissions tests for diesels around the world, in whichever form that testing took place. To date, it’s thought to have cost the Volkswagen Group over £38bn in penalties, fines and compensation.
2018: The High Court of Justice has awarded the Volkswagen Group nearly half-a-million pounds in compensation with regards to costs for a Group Litigation Order that directly relates to the ‘dieselgate’ scandal.
As the latest round of legal action against Volkswagen commences, in which investors are seeking compensation for the loss of share value to the tune of £8.2bn, there have been a number of “unnecessary and ineffective hearings” brought against the VW group in 2017 by legal firms acting on behalf of the UK owners, many of which have been premature, needless and unreasonable according to the court.
With this in mind, they will be awarding costs against some of the claimants to the value of £468,000 to Volkswagen, but it should be noted that this in no way diminishes the legality or the action against the Volkswagen Group in the longer term; this is perhaps more of an indication of the ‘ambulance chaser’ attitude toward the legal teams trying to make a fast penny from the action.
Despite there being no payout (as yet) for UK owners, Vopayoutn have already settled many cases in America, with claimants receiving a typical payout of between $5,000 to $10,000 depending on the age of the vehicle, so far, they’ve paid around $14bn.
The UK situation
To date, Volkswagen has offered to remove the defeat device from affected vehicles, as a free of charge service, but some drivers have commented on the lack of performance of the vehicle afterwards, which is no surprise.
There are a number of planned actions against the Volkswagen Group, the reason why the High Court has sided with VW in respect to the compensation has nothing to do with their liability, but there has been a deadline imposed; you need to register your claim before 26th October 2018 regardless of whether you’ve had the device removed or no longer own the vehicle. Missing this deadline could mean you’re not eligible for compensation.
Gareth Pope, head of group litigation for Slater and Gordon said: “Volkswagen have demonstrated high levels of contempt for UK owners by refusing to admit liability in the UK, over the same issue that they’ve paid compensation for elsewhere. They are relying on existing and former owners to not sign up to a group action”. It must be stated that Slater and Gordon are one of the firms criticised by the court for bringing premature and unnecessary action.
The bigger picture
It’s possible that this issue doesn’t just affect Volkswagen owners either, it’s believed that some Skoda, Seat and Porsche vehicles were also affected; the problem is so deep that the maker of the engine management system (Bosch GmbH) are ‘sponsoring’ some of the fines.
Volkswagen management has said that the Senior Management teams knew nothing of the cheating until 2015, that the decision to deliberately falsify the emissions was taken by middle-management and engineers, and if that was really the case, you’d have to wonder what other Quality Control procedures have been missed.
It’s this delay in reporting the scandal that has led to group litigation from investors – the share price lost 40% of its value in one day (approximately €25bn), and with record fines and compensation claims, Volkswagen has (to date) lost around $50bn, with yet more to lose when the UK legal action happens.
It’s worth noting that the U.S. has taken around $25bn in fines, penalties and compensation for the 580,000 diesels sold, whereas, in Europe, that number is closer to 8,000,000 diesel vehicles sold.
Further still, in December 2017, a Senior Engineer for Volkswagen USA was jailed for seven years for his part in the scandal, and the U.S. authorities are pushing to extradite Martin Winterkorn (Chief Executive Officer for Volkswagen) to face justice, but no extradition treaty exists between the USA and Germany so that’s unlikely to happen, however, it does send out a strong message to Volkswagen.
It seems that even three years later, Volkswagen is still paying the consequences for what’s become the biggest motoring scandal that we’ve seen, but it’s thanks (in part) to their action that new legislation in the form of the WLTP has been implemented, and that’s a good thing.
Are you part of the group litigation against Volkswagen? Do you think that Volkswagen’s CEO should face a prison sentence? Do you agree with the decision to compensate VW for unnecessary action? Let us know in the comments.