The end of a crisis: Volkswagen agrees to settle with German customers
Author： Edwin Gall
Just before the end of the extended acceptance period for the diesel settlement, the Volkwagen Group has agreed on compensation payments with around 235,000 customers in Germany. As a result, the Federal Association of Consumer Advice Centers (FACAC) has withdrawn its test case against the company, as FACAC board member Klaus Mueller said on Thursday. "Never before have so many consumers been able to benefit in one go." Mueller emphasized that the proceedings mark the end of a "historic court case".
settlement comes after over five years since the “Dieselgate” crisis started to
unfold worldwide. It adds to the more than 20 billion USD it has already spent on
fines related to the crisis as well as settlement already paid in other
countries like the USA and Australia.
Before agreeing to pay, Volkswagen tried to gamble for the long run in Germany, because in the German judicial system, some damages that customers suffered through the implementation of so called “defeat devices” decrease with time. Due to this, Volkswagen was very hesitant to pay reparations to its customers on its home market.
According to VW, a total of approximately 750 million euros in payments in connection with the exhaust gas scandal will be made as of May 5th to German customers. "The aim of the settlement was to save tens of thousands of customers, Volkswagen and the justice system from lengthy proceedings," the company announced. The fact that around 90 percent of the more than 260,000 persons entitled to settlement had agreed to the settle "clearly exceeds our expectations". Depending on the age and type of vehicle, customers are to be compensated with amounts ranging from 1350 to 6250 euros. About 17,000 cases were still under investigation on May 7th.
Volkswagen and the FACAC had agreed on the diesel settlement at the beginning of the year. The agreement provides that consumers affected by the diesel affair will receive compensation for the loss of their vehicles Value. The settlement was open to car owners who had joined the action for declaratory judgement and had purchased their cars before April 31st, 2015 and to whom German law applies, as Jutta Gurkmann of the FACAC explained. The declaratory judgment was a first time in Germany, as the German judicial system does not know any class action lawsuits like the system in the US.
While the claims of the participants in the test case have been settled with the diesel settlement, there are still tens of thousands of customers who are suing VW privately. On May 5th, the Federal Supreme Court (FSC) has heard such an individual action for the first time. A man from Rhineland-Palatinate is claiming back the full purchase price of 31,500 euros from Volkswagen for his used car bought in 2014. In the summer, the FSC is scheduled to set further dates for the hearing of repayment claims for manipulated diesel vehicles.
The European Court of Justice (ECJ) is also currently hearing about the long-term consequences of the diesel scandal (Case C-693/18). On May 7th, the ECJ expert in charge took the view that software used to reduce exhaust gas values in laboratory tests was a "shutdown device" - and thus prohibited under EU law. A ruling on this is expected to follow in a few weeks.