VW are reportedly preparing themselves for another huge payout as U.S. District Judge Breyer has allowed claims brought by investors to proceed against VW.
This is in the latest in the long line of settlements VW are set to be making in the U.S. as a result of the emissions scandal. Billions have been set aside for U.S. settlements, yet U.K. and European consumers remain ignored when it comes to settling their claims against the German automaker.
Green light
U.S. District Judge Charles Breyer has reportedly allowed investors to proceed with their claim against VW, although investors agreed to VW’s request to dismiss parts of the lawsuit.
Judge Breyer allowed the claim that alleges VW and former-CEO, Martin Winterkorn, intentionally or recklessly understated VW’s financial liabilities since May 2014. Judge Breyer dismissed claims for financial statements that were issued before then.
The dismissed claims were as follows:
| VW “may have deliberately employed an illegal defeat device [which] does not mean the company knew with reasonable certainty that it was going to get caught.” |
| VW Brand Chief Herbert Diess, understated VW’s financial liabilities in 2015. |
Plaintiffs’ arguments
The claimants’ key argument was that VW should’ve informed the market in a timely fashion, and should not have understated possible financial liabilities either. The claimants, who are mostly U.S. municipal pension funds, argue that VW’s market capitalisation fell by $63 billion (£49 billion) after the emissions scandal erupted in mainstream media in September 2015.
Further to Judge Breyer’s decision, the VW Group responded saying it was pleased “with the court’s decision to limit the scope of the plaintiffs’ (claimants’) allegations, and believes the remaining claims are without merit, which we intend to demonstrate as this case proceeds.”
This statement doesn’t come as any surprise. VW will of course try to limit their liability as much as possible, and we imagine they’re not keen on “opening the floodgates” in terms of further action against them.
Still no settlements in the U.K.
VW continue to deny liability in the U.K., but we remain confident we will win our case against them. To move past the emission scandal, we say they must address and resolve the scandal properly over here too – which means compensating affected vehicle owners in the U.K. as they have done in the U.S.
Recalls and fixes
In other news, VW has tried to remedy all the affected vehicles and their owners. According to www.cars.com, more than 60% of VW’s four-cylinder diesel vehicles have been repaired or taken off the roads in the U.S. This announcement comes eight months after regulators approved the settlement.
The vehicles in question include Audi and Porsche TDI diesel models where they’ve been “reacquired, modified or otherwise removed from commerce.”
VW has reportedly paid out $6.3 billion (£4.9 billion) to customers who participated in the four-cylinder claims programme to date. This amounted to a pay-out of around $21,000 (£16,000) per vehicle owner. VW has given consumers until September 2018 to decide if they want to participate in the programme, and they also have deadlines to remove or fix 85% of the affected diesels by mid-2019.
The pressure is mounting…
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