Vehicle owners and Judge Belobaba dissatisfied with the VW Canada’s proposed settlement for 2.0 litre diesels

Although VW Canada has a settlement proposal on the table, the presiding judge has commented that it may not be in the best interests of the consumers.

On 31^st March 2017 the Ontario Superior Court of Justice held an approval hearing for the 2.0 TDI litre vehicles aka the TDI Settlement Agreement applicable to Canada (outside of Quebec). This hearing followed a hearing on 22^nd March in Quebec held by Justice Marie-Claude Lalande.

But the question now is whether this settlement will be good for the victims or not…

Before the settlements can be finalised, the Ontario Court must issue written orders. So far, the Quebec Court seems to have reached a decision, but the Ontario Court has some reservations and has requested additional information, giving a deadline date of response on 7^th April.

Is the settlement offer enough?

The additional information requested by the Courts doesn’t come as a surprise. The Ontario Judge, Edward Belobaba, said that the settlement proposal is “nowhere near” being in the best interests of consumers. Judge Belobaba addressed his concerns by bringing to light section 18.2 of Ontario’s Consumer Protection Act.

Under this section, it notes that:

Under section 18.1, it notes that a consumer can withdraw from the contract and is entitled to a remedy, including damages. Section 18 implies that, due to VW’s intentional misrepresentation, 2.0 litre vehicle owners are entitled to a full refund.

Settlement offer doesn’t take into consideration extra costs

Judge Belobaba considered depreciation as a valid reason for the drop in the valuation. There are around 105,000 Canadians represented in the class action, according to Automotive News, and some 500 of them have made written objections. Some argue that the Canadian Black Book values do not take into consideration extra costs incurred by the consumer, such as dealer accessories, extended warranties, fees, or taxes.

Erich Bretholz spent an additional $6,000 (£4,800) on two extended warranties, stating that: “I bought extended warranties because I intended to keep the car”. Mr Bretholz isn’t the only one dissatisfied with the proposed settlement, other vehicle owners have complained of the same issue.

Canadian Black Book valuation

The settlement agreement proposes that VW vehicle owners of 2.0 litre diesel engines will be compensated for the value of their vehicle as of September 2015 (just before their market value was affected). The market value as of September 2015 will calculated in accordance with the Canadian Black Book system, which is a trusted source for valuing consumer vehicles. The settlement agreement will seek to compensate clients from $5,100 to $8,000 (£4,020 to £6,400) in damages.

Estimated pay-out

The projected pay-out will total around $2.1 billion (£1.6 billion). The estimated pay-out doesn’t encompass the 3.0 litre TDI diesel engines. It’s believed that there will be an additional settlement agreement; however, this has yet to be determined.

If both settlement agreements are approved and finalised by Justice Lalande and Judge Belobaba, affected vehicle owners can start to file for claims as soon as 28^th April 2017. However, it’s still questionable whether this is fair and reasonable amount.