Motorists affected by emissions scandal seek ‘hundreds of millions’ of pounds in court battle

A high court battle to decide if Volkswagen must pay out hundreds of millions of pounds in compensation to owners of cars affected by Dieselgate is set to play out in spring next year. 

Volkswagen and lawyers representing around 95,000 motorists have been locked in a group action lawsuit – the biggest ever raised in the UK – for four years and a final pre-trial hearing in December will agree the details and set a date for the trial in 2020. 

Battle lines have been drawn between Volkswagen, represented by London law firm Freshfields Bruckhaus Deringer, and a consortium of 11 lawyers led by Slater and Gordon, alongside firms SPG Law and Leigh Day. 

The number of motorists represented, however, is fluctuating and has gone down in recent months as duplicate and irrelevant claims are weeded out. Some Jeep and Jaguar owners had to be taken off the list, Autocar has been told. 

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The trial will be held under civil rather than criminal law – it is about compensating motorists rather than punishing any wrongdoer. As such, the legal arguments will centre on three points under the so-called ‘threefold test’. 

Slater and Gordon will have to win all three for motorists to gain any compensation from Volkswagen in a trial tipped to take eight or nine months, with both sides expected to deploy an army of technical experts to help argue their case. 

The first legal point will be to determine whether Volkswagen has breached its ‘duty of care’ and will hinge on whether the firm fitted a ‘defeat device’ to cars equipped with the EA189 diesel engine in 1.2, 1.6 and 2.0-litre capacities. 

“It remains Volkswagen Group’s case that the affected vehicles did not contain a prohibited defeat device and that any findings by foreign authorities on that point is not binding on the English Court,” the firm told Autocar in a statement. 

“Our consistent position has been that the instigation of legal proceedings in the high court in London is unfounded.” 

This defence is disputed by Slater and Gordon, since Volkswagen has admitted in the US to having fitted a defeat device that detected a rolling-road test and temporarily modified the combustion to reduce NOx emissions. This admission carries no legal weight in the UK. 

“VW has already admitted it programmed the vehicles to operate in two modes (test and road). But have failed to explain why they did this. The judge has now ordered them to explain,” said Slater and Gordon in its statement to Autocar. 

At December’s pre-trial hearing, Slater and Gordon will argue that the English high court is bound by a finding by the KBA, the German type approval body, that Volkswagen’s software includes a defeat device. Volkswagen will counter that it believes the “switching function” between test and road modes “used in the UK and the EU is legal”. 

If Slater and Gordon argues this point successfully, it then has to establish ‘causation’ and prove a link between damage or harm to the car and the defeat device software. It may be more difficult to convince the judge of this. 

Volkswagen is firm that “our UK customers have not suffered any loss or damage as a result of the NOx issue. The affected vehicles are safe and roadworthy and perform as advertised.” 

Slater and Gordon argues that the cars were sold “deceitfully” and could not be lawfully sold, but once the Dieselgate scandal was exposed and Volkswagen recalled cars for a technical fix, owners suffered poorer mpg, CO2 and drivability

The headline-grabbing final point will be the size of any multimillion-pound payout, based on the losses suffered by motorists. Slater and Gordon is aiming to prove that owners have lost out on residual value owing to the defeat device and in terms of issues caused by the fix. 

“Our clients tell us the fix has made vehicles less fuel efficient, has impacted performance and resulted in instances of vehicles going into limp-home mode in dangerous circumstances,” said Slater and Gordon. 

Finally, it is pushing for “exemplary damages” to punish Volkswagen for its alleged deceit. 

Volkswagen, of course, will attempt to demonstrate evidence to the contrary – that there has been no adverse impact on residual value, CO2, mpg or engine performance. And it stresses that the “fix” resolved “the vast majority of complaints to our customers’ satisfaction”. 

If it looks as though the damages might fall short of expectations and won’t cover the legal costs, the case could be settled out of court. 

More twists and turns are to be expected as the case meanders its way into court later this year, but affected motorists and Volkswagen can at least look forward to the protracted process finally being resolved by the end of 2020.

How will damages be decided?

Behind the scenes, Volkswagen is understood to have undertaken a research project into the effects on residual values – which is where the biggest losses might be crystallised. 

Of course, Slater and Gordon has a big incentive to win as large a payout as possible to satisfy motorists attracted by ads taken out by the law firm as it built the group litigation. It estimates damages at more than £2000 per car – made up of losses on residual values, breach of contract and unfair trading regulations related to finance agreements – although legal costs will absorb at least 30% of that. 

But a different estimate suggested to Autocar was a “few hundreds of pounds” to a maximum of £1000 per car. If damages are expected to average £1000 per claim, that will be £97 million in total and well short of Slater and Gordon’s “hundreds of millions” estimate. 

That’s important because the law firm has financial backing from Therium Capital, which is expecting a payback on its investment. 

If the damages fall short of expectations, the motorists’ side might be better off settling out of court, because £97m might only just cover legal costs.

Read more

Dieselgate: VW admits to 28,600 UK complaints after software fix​

VW Dieselgate woes continue after German court decision​

Dieselgate: recordings of former VW engine chief emerge​

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Comments
9

25 July 2019
But why aren't our governments taking this piece of shit organisation down?

25 July 2019

It's ridiculous that if they only get 97million it may only just cover the legal costs, also seems crazy that VW admitted to fitting a cheat device to US courts but that evidence can not be used here.

I can't speak from experience as I've never owned a VW diesel, but if this scandal has indeed effected residuals and there has been a lot written about the fix ruining cars and being carried out during routine servicing without being requested by owners, then I believe that VW should stump something up to owners, whether it can all be proven is another matter.

As Jason says above, why aren't the government pursuing this? Surely without the cheat device these cars would have been in a higher rfl/tax bracket? And for that matter their lower tax bracket gave them an advantage and probably larger market share than other manufacturers.

25 July 2019
si73 wrote:

I can't speak from experience as I've never owned a VW diesel, but if this scandal has indeed effected residuals and there has been a lot written about the fix ruining cars and being carried out during routine servicing without being requested by owners, then I believe that VW should stump something up to owners, whether it can all be proven is another matter.

 

I can speak from experience (several times over as I've owned VW tdi products).

The fact is it hasn't affected residuals. And it certainly has had no affect on sales of new VW's, SEAT, SKODA and Audi - the number of new cars are there for everyone to see.

We need to look at our laws. People me included, bought VW diesels for their lower motoring costs. Not sure if there would be many 'green party' members who bought them for their environmental potential but fact is our VED system was only based on Co2 and we bought them because they fell in to the lower tax bracket. WE BOUGHT THEM TO SAVE MONEY.

Until they were exposed in the USA, nobody over here had heard of NOX let alone bought a car based on NOX levels.

If there was any cheating and the Co2 output was wrong then it's us taxpayers who lost out - i.e. the people who bought VW's have actually paid less than they should of, or they may have bought another car. But given the government aren't asking the owners for this money to be returned I fail to see how the buyer has lost out.

Of course anyone with an ounce of sense can see right thru this - it's all about the lawyers. They care not for the environment or if people have lost money, they care about themselves - if there's no profit to be made then no case exists.

Yes I too read of owners having problems after VW fixes were applied - I heard it at the time, but I haven't heard anything since - it's all gone quiet, No?  Do I reckon it was in folks heads - yes.

I personally know two folk who after the news story broke were suggesting their cars started to run poorly. I asked them when did they take their car to the garage?  "Oh we never visited the garage, but the car is definitely not running the same and the fuel economy is worse".

Enough said.

289

25 July 2019

Spot on Scotty.

Apart from a few cranks and compensation junkies it is a non event here in the UK....noboddy gives a shit.

I dont know a single friend or aquaitance with VW Group product who has stopped purchasing replacement cars from VW and its various brands. Indeed many never bothered with the update since the cars were running pefectly well, leaving it to the dealership to decide what to do when they P/ex the car. I mean, why would you bother?

The Lawyers could lose their shirt if they cant prove the threefold test - yes VW would have to 'pull the genie out of the bag' to justify the two working modes, but clearly this wont be enough on its own to win this case.

I nearly fell off my chair when I read the bit about weeding the Jeep and Jaguar owners out first!!  Just shows the effect of the compensation culture.

25 July 2019
289 wrote:

I dont know a single friend or aquaitance with VW Group product who has stopped purchasing replacement cars from VW and its various brands. Indeed many never bothered with the update since the cars were running pefectly well, leaving it to the dealership to decide what to do when they P/ex the car. I mean, why would you bother?

VW are incapable of engineering a solution within legal bounds to comply with the law - something their major competitors have been able to do.

Why would you buy a clearly inferior product? If they can't engineer their emissions correctly, what other components are they unable to engineer to an acceptable standard?

VAG group products are mediocre at best - you'd do far better to buy elsewhere.

25 July 2019
scotty5 wrote:

Enough said.

[/quote]

Seems like too much

Honestly speaking

25 July 2019
The only winner here is the law firm. If these people are so worried about the emissions i wonder how many will offer to pay the government the money they have saved on tax?

25 July 2019

Our government lost out on tax revenues because of the artificially low Co2 figures VW group claimed for its models: They should be pursuing VW for this shortfall to add to the public coffers, but of course they won't.

25 July 2019
Four years after the scandal broke out, finally, the hearing begins.

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