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Volkswagen Settles For £193m In Dieselgate Scandal

After a 5-year fight, Volkswagen has agreed to pay UK VW drivers involved in the class-action lawsuit over the dieselgate scandal a hefty sum. Approximately 91,000 people in England and Wales will receive payouts.

What is the Dieselgate scandal?

Dieselgate is one of the worst scandals in the motor trade industry’s history. It began in September 2015, when the United States Environmental Protection Agency (The EPA) stated that Volkswagen was in violation of the Clean Air Act.

VW had a major push to sell diesel cars in the US, with the marketing focus on their cars’ low emissions. The EPA investigation found that Volkswagen cars being sold in America had a ‘defeat device’. Essentially, there was software in the vehicle’s diesel engines that could detect when they were being tested and change performance in order to improve test results.

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Claimants in the lawsuit argued that the VW Group, which also includes the Audi, Seat and Skoda brands, misled consumers. The nitrogen dioxide levels emitted from the car were lowered under the lab conditions used at the time. Though the vehicles displayed low nitrogen dioxide levels under test conditions, the cars were actually emitting up to 40 times the legal limit of nitrogen dioxide when out on the road.

The EPA’s findings cover 482,000 cars in the US only, including the VW-manufactured Audi A3, and the VW models Jetta, Beetle, Golf and Passat. However, the VW has admitted that about 11 million cars worldwide, including eight million in Europe, are fitted with the ‘defeat device’.

How Much Did UK Dieselgate Claimants Receive in the Settlement?

The German carmaker initial refused to compensate owners of diesel models affected in the UK, citing EU law. VW faced claims brought on behalf of more than 100,000 people by several legal firms. Following the dieselgate settlement, more than 91,000 recipients in England and Wales will benefit from compensation average payouts of £2100, following assistance from law firms such as Slater and Gordon, Harcus Parker, Leigh Day and PGMBM.

The scandal has cost the company tens of billions of pounds in fines and civil settlements in the US, on top of recall costs elsewhere.

London’s high court dismissed the proceedings onMay 25th after the settlement. The action involving customers in Scotland is at an earlier stage of the legal process but looks promising.

The Judgement

So, Volkswagen has now agreed to pay an eye-watering £193m to motorists, as part of reaching an out-of-court settlement in relation to the diesel emissions scandal. With the case now settled, avoiding the prospect of an expensive and harmful six-month trial at the High Court in London.

That being said, the agreement brings ‘no admissions in respect of liability, causation or loss’. Volkswagen instead stated that a settlement ‘was the most prudent course of action commercially’. A rather cold attitude from the German car giants.

However, their statement relating to the settlement stated that they ‘like to take this opportunity to sincerely apologise to their customers for the two-mode software installed in the EA189 vehicles’. They also said that they would ‘continue to work to rebuild the trust of their customers here in England and Wales. This settlement represents an important further stage in that process.’

Final statements

Philip Haarmann, chief legal officer of Volkswagen AG, said: ‘The Volkswagen Group is pleased that we have been able to conclude this long-running litigation in England and Wales’.

In their statement, the lead solicitors at Leigh Day, Bozena Michalowska and Shazia Yamin, said that they ‘are delighted that this case has finally been settled for our clients and the claimants in the NOx emissions litigation. We have been unwavering in our belief in our clients’ cases’.

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