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11 December 2023

Volkswagen faces first mammoth diesel lawsuit on home turf

Photo: AFP


Car behemoth Volkswagen will face a German court Monday, as hundreds of thousands of owners of manipulated diesel cars demand compensation four years after the country's largest post-war industrial scandal erupted.

The first hearing in what is likely to be a grinding, years-long trial opens at 10 am (0800 GMT) in Brunswick, around 30 kilometres (19 miles) from VW headquarters in the northern city of Wolfsburg.

Around 450,000 people have joined a first-of-its-kind grouped proceeding, introduced by lawmakers after the "dieselgate" emissions cheating scandal broke in 2015.

Consumer rights group VZBV, representing the plaintiffs, says the German carmaker deliberately harmed buyers by installing motor control software that allowed vehicles to pollute far more on the road than under lab conditions.

The trial is Germany's largest so far in the tentacular diesel scandal, which last week saw VW chief executive Herbert Diess charged with market manipulation over his role.

50 questions for judges

In the mass lawsuit, the most important of around 50 questions for judges is whether Volkswagen "caused harm" by acting "dishonestly".

Klaus Mueller of VZBV said he is "convinced" the car firm did, while VW says "clients did not suffer harm".

"Hundreds of thousands of cars are used" on the roads without problem, VW lawyer Martine de Lind van Wijngaarden said.

Even if judges find in favour of plaintiffs, there will not be an immediate compensation payment.

Rather, every owner registered in the trial will have to claim individually.

VW thinks a final judgement could arrive in 2023 at the earliest, if the case is appealed all the way to the Federal Court of Justice.

Individual proceedings could then take at least another year - in the court of first instance.

By then, the cars' market value could have eroded to a negligible amount, making a buyback cheaper for the firm.

Alongside the grouped proceeding, 61,000 individual lawsuits have been filed in Germany, and some have already led to out-of-court settlements.

30 billion euros

Since 2015, when Volkswagen admitted to manipulating 11 million vehicles worldwide to fool emissions tests, the scandal has cost the group over 30 billion euros ($33 billion) in fines, compensation and legal costs.

Most of that sum - $22 billion - has gone to the US, while in Germany VW has so far paid just 2.3 billion dollars spread across three fines.

Alongside car owners, investors are claiming damages for losses they suffered when the group's share price plummeted after it came clean.