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Volkswagen: Germany's first mass lawsuit begins



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Germany's first mass lawsuit begins with 450,000 owners of diesel Volkswagen cars take on the company.

They argue they are owed compensation for being sold cars emissions data.

The scandal has already cost VW € 30bn (£ 26.6bn).

It has faced class action claims in the US and Australia, but this is the first time Germans could pursue group claims since the law was changed last year.

This trial will settle the points of law and the claimants will later be able to file follow-up claims for compensation if they are successful.

The trial, at the Braunschweig Higher Regional Court, about 20 miles from VW's Wolfsburg head office is likely to last years, however.

Part of VW's settlements include a deal to buy back 500,000 cars in the US, where it has agreed to pay more than $ 25bn (£ 20bn).

In Australia, the company will pay 1

27 million Australian dollars ( £ 70m) to compensate owners, paying them A $ 1,400 apiece.

Last week it emerged that three current and former Volkswagen executives were charged with market manipulation in connection with the diesel emissions scandal.

Chief executive Herbert Diess, chairman Hans Dieter Pötsch and ex-boss Martin Winterkorn, did not inform investors early enough about the financial fallout,

In 2015, the firm claimed using illegal software to cheat on emissions tests. VW said it was sure those allegations would prove groundless.

This may be a landmark lawsuit – and in terms of the sheer number of claimants, it's certainly attention grabbing. But it may not be the biggest concern for Volkswagen right now.

Unless there is a settlement, the legal process is likely to take years – VW expects it to take at least four. Even if they win, car owners will have to go back to court to receive compensation.

Meanwhile, VW's chairman and chief executive are both fighting criminal charges for alleged market manipulation linked to the diesel scandal.

Volkswagen itself is facing the possibility of hefty fines from the EU, after being accused of colluding with other manufacturers to delay the introduction of emissions control technology.

It's safe to say its lawyers are already keeping pretty busy at the moment. And in the meantime, the company is trying to turn itself into a leader in the market for electric cars.

Against that background, the group lawsuit may seem for the moment like just another irritation.


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