VW Dieselgate compensation cases in Europe and the US dropped

04 September 2017

VW Dieselgate compensation cases in Europe and the US dropped

04 September 2017

A German court in Brunswick has rejected a case which was seeking compensation for German owners of Volkswagen (VW) vehicles affected by the Dieselgate scandal.

The case was bought by consumer rights group myRight and US law firm Hausfeld, which accused the vehicle manufacturer of breaching European Union law by selling cars with software that was banned by EU rules. VW has said that this software does not breach such rules, but is in the process of recalling vehicles to remove it, insisting that it will not affect the value of vehicles.

In the US, the German carmaker has been ordered to pay around $25 billion (€21 billion) in compensation and vehicle buybacks following the discovery that vehicles were cheating emissions tests in the country. However, no such arrangement has been made in Europe, except for a recall procedure on 8.5 million vehicles, as VW insists it did not cheat testing on the continent.

The court said that Volkswagen vehicles in Germany had not lost their road certification following the discovery of the software and customers had thus not been disadvantaged to the point where they deserved compensation.

The legal firms suggested they would appeal the ruling prior to the decision being announced, in anticipation of the rejection of the case. Both companies want the situation to be escalated as quickly as possible to the European Court of Justice in their bid to force VW to buy back all the affected vehicles at their original sale price.

The manufacturer is also facing a number of group action lawsuits for compensation by drivers, including cases in the Netherlands and Italy. Meanwhile, the German Government has also suggested that it would relax its rules on group action lawsuits to allow VW customers to seek compensation in the country, in a potential political move in the run up to the country’s national elections.

Meanwhile, a judge in California has rejected a lawsuit brought by the state of Wyoming which was seeking an additional $1 billion (€840 million) in additional penalties for environmental damages, linked by the state to the VW scandal. The move could see the company protected from other claims for similar penalties by other US states.

US District Judge Charles Breyer said Wyoming's environmental claims were prohibited by the Clean Air Act.

‘Volkswagen has indeed been held responsible. But because Volkswagen’s conduct took place during manufacturing, Congress determined that EPA, not the 50 States, was best situated to regulate it,’ Breyer wrote, referring to settlements VW has already reached with the Environmental Protection Agency.

The German automaker said: ‘The court has recognised that Wyoming and the other states should not be allowed to hold Volkswagen responsible for the same conduct for which it had already received federal sanctions. Volkswagen now intends to seek dismissal of all nine similar state actions, and anticipates filing dismissal motions against the states of Illinois, Minnesota and Ohio today.’

Volkswagen previously settled with Wyoming and most other states over consumer claims for more than $600 million (€504 million) but not over environmental matters.

Photograph courtesy of Volkswagen Group