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Volkswagen continues to refuse compensation to vehicle owners outside the US

Volkswagen's European customers who have been affected by the emissions scandal continue to be denied compensation by the company, despite a settlement deal for affected US customers

Posted on 15 February 2017

Volkswagen has reportedly dismissed a request from the European Commission to compensate affected European customers in early 2017. The request was made during a meeting between the EU Justice Commissioner Vĕra Jourová and Volkswagen CEO Matthias Müller, with Müller reportedly agreeing to the discuss compensation again at a meeting in March 2017.

While in the US Volkswagen has agreed to buyback affected vehicles and give each owner some $5100 in compensation, Volkswagen continues to refuse to compensate consumers in Europe because it argues:
  • The emissions cheating software was not unlawful because it did not meet the definition of “defeat device” under EU law, unlike under US law;
  • Consumers suffered no loss as a result of the software. The resale prices of affected vehicles have not gone down as a result of the scandal, and VW will be fixing affected vehicles free of charge so that the vehicles meet emissions standards.

However, pressure continues to grow against Volkswagen both inside and outside the EU. In England and Wales, Leigh Day and various other law firms are seeking compensation for affected consumers and the High Court may make a group litigation order to manage the claims.

In Australia, consumer groups have written to the car maker asking why Australian owners are not being offered compensation or a refund on their affected vehicle, similar to the settlement deal agreed in the US.

Meanwhile, one of Germany’s major fish and seafood producers, Deutsche See, launched legal action against Volkswagen after it reported being unable to reach an out of court settlement regarding the 500 vehicles it leases from the company. The business promotes itself as being environmentally friendly and in 2010 won an award for being Germany’s “most sustainable company”. This may be the first legal action faced by the car marker in Germany from a big corporate client.

The former chief of Volkswagen’s supervisory board, Ferdinand Piech, has allegedly told German investigators that the former CEO of the company, Martin Winterkorn, who resigned days after news of the scandal broke in September 2015, knew of the car maker’s emission cheating systems months before the story became public. Piech claimed that he had raised the issue with Winterkorn and members of the supervisory board steering committee in March 2015. Volkswagen strongly denied the claims and is reported to be weighing up taking legal action against Piech. 

The authorities in various countries have been weighing up criminal prosecutions. The German city of Brunswick announced that they were investigating Winterkorn for fraud and market manipulation and claimed they had “sufficient indications” that the former chief knew of the cheating. 

Authorities in Luxembourg have launched criminal proceedings over the Volkswagen diesel emissions scandal. Authorities in Luxembourg granted type approval to the Audi vehicles affected by the scandal and is one of seven countries facing possible action by the European Commission over their alleged failure to take action over emissions cheating. François Bausch, the country’s Infrastructure Minister told journalists “we have decided that, as there is a large probability that a defeat device was used, to launch a lawsuit against unknown persons”. 

The UK Government is also facing possible action by the European Commission for its failure to take action over emissions cheating, the UK having granted type approval for the Skoda vehicles affected by the scandal. The Department for Transport has not ruled out taking action against Volkswagen, but stated a prosecution may be difficult because there was no evidence of any misconduct having been perpetrated in the UK.  

In the UK, the Consumer Protection from Unfair Trading Regulations allow vehicle owners to bring a claim against Volkswagen Finance and Volkswagen dealerships for a “commercial practice” if it contains false information or if it is likely to mislead the average consumer in its overall presentation. If the claim is successful, vehicle owners can claim for a percentage discount on the purchase price they have paid without having to prove that they have sustained a loss as a result of Volkswagen’s actions.

Leigh Day is bringing a claim for compensation on behalf of affected vehicle owners under the Unfair Trading Regulations.