Volkswagen (VW) has agreed to pay £193m to settle 91,000 Diesel Emissions claims in England and Wales linked. This settlement relates to the first tranche of diesel emission claims against VW. Law firms are involved in a separate class action. This covers a second tranche of claims against VW on similar grounds.
Claimants will receive average payments of over £2,100 each after joining the class action. The high court in London dismissed the proceedings following the settlement.
Despite the payout, Volkswagen did not admit any wrongdoing. In a press release, they said the settlement was a “prudent course of action commercially” to avoid the legal cost of a six-month trial and appeals. The company says too much time has passed since the scandal emerged in 2015 for other owners to bring claims, although there are two other tranches of claim in the early stages of litigation.
In a statement, VW said: “The Volkswagen Group would, once again, like to take this opportunity to sincerely apologise to their customers for the two mode software installed in the EA189 vehicles. The Volkswagen Group will continue to work to rebuild the trust of their customers here in England and Wales.”
Slater and Gordon, the firm representing the bulk of the claimants, said it was “delighted to have secured such a significant financial settlement for many thousands of Volkswagen Group car owners”. They added: “Settlement of the group action avoids the need for a lengthy, complex and expensive trial process, and achieves a financial result that is fair and right for all claimants.”
The deal was hailed as a victory for the claimants’ backers after a legal battle of five years. It had been due to go to trial in January 2023.
Diesel Emissions Claims
The diesel emissions scandal began in September 2015. The United States Environmental Protection Agency (EPA) issued a notice of violation of the Clean Air Act to VW. Researchers found that from 2008 to 2015, car models were fitted with software that recognised when a car was being tested under lab conditions, tuning the engine to limit nitrogen oxide emissions (NOx). On the road, emissions were far higher.
When the cars were operating under controlled laboratory conditions they are typically put on a stationary test rig. When this happens the device appears to have put the vehicle into a sort of safety mode in which the engine ran below normal power and performance. Once on the road, the engines switched out of this test mode.
At the height of the Dieselgate scandal, it was claimed in the US that vehicles were emitting up to 40 times the legal limit of nitrogen dioxide when out on the road.
The lawsuit includes VW’s brands Audi, Seat and Skoda. With VW recalling millions of cars worldwide, it set aside €6.7bn (£4.8bn) to cover costs. That resulted in the company posting its first quarterly loss for 15 years of €2.5bn in late October.
VW offered to fix affected models and started the recall in January 2016. Senior executive Oliver Schmidt was released after being sentenced to seven years in prison for evading American clean-air laws.
Who Can Claim Now?
Law firms are litigating against Mercedes at the moment. However, diesel emissions claims against BMW, Vauxhall, Ford, Renault and Seat are likely to start in the near future. The diesel emissions scandal could cover even more brands following that.
Law firm PGMBM started legal proceedings against Mercedes in England in 2020. Since then other firms have also joined or are preparing cases. Mercedes argue that claims brought by UK law firms are “without merit”. They also said it will “vigorously defend” against them or any group action.
Past owners can claim if they experienced some kind of financial loss. This may include:
- If they paid more for the vehicle than you otherwise would have
- They wouldn’t have bought it at all had they known about the alleged emissions flaws
- They sold it on but got less for it than you would have had it not been affected.
Some law firms will ask claimants to confirm that one of the above applies to them.
Many other automakers had also been using software programmed to cheat testing. The real emissions output of these cars was much more than was reported due to “defeat” devices.
There main reasons consumers have lost out due to the Diesel Emissions scandal are:
- Increased Nitrogen Dioxide levels are harmful to people and the environment
- Customers will have experienced higher fuel bills and maintenance costs
- The performance of these vehicles was worse than expected
In 2016 a report by the Royal College of Physicians said that air pollution causes the premature deaths of up to 40,000 people a year in the UK, with particles caused by combustion engines and NOx being part of the cause.
Vehicles affected were generally bought between 2008 and 2019. These are the dates when vehicles have been initially uncovered to hold a defeat device.
Volkswagen has paid billions in settlements across the world related to the “Dieselgate” Scandal. The legal proceedings have taken longer in England and Wales because of a different system compared to places like the US. With class actions in the US, lawyers can act on behalf of a whole group of claimants without needing their explicit approval. Mercedes has also already spent billions globally.
In The UK
The Department for Transport announced on 24 September 2015 that it would begin re-testing cars from a variety of manufacturers to ensure the use of “defeat devices” was not industry-wide. The UK Parliamentary Transport Select Committee opened an enquiry into Volkswagen Emissions Violations with evidence sessions on 12 October 2015 and 25 January 2016. The Select Committee published a letter from Paul Willis, managing director of Volkswagen Group UK Ltd on 21 December 2015 stating: “In very simple terms, the software did amend the NOx characteristics in testing. The vehicles did meet EU5 standards, so it clearly contributed to meeting the EU5 standards in testing”.
A report on “real world” tests commissioned by the Government published in April 2016 showed emissions from 37 diesel engines up to 14 times higher than had been claimed, with every vehicle exceeding the legal limit of nitrogen oxide emissions. Only Volkswagen group vehicles were found to have test cycle detection software.
It is estimated by some that consumers may receive an average of £8,500 in compensation per claim. This is just an estimate though and there are many uncertainties regarding these figures. The class action could total over £10 billion. That would make it one of the most significant class actions the UK has ever seen.
While the individual can do some types of financial claims themselves, diesel emissions are complicated legal proceedings. As a result, claimants need a law firm to represent them.
Claims Against Other Car Brands
Major car manufacturers, including Toyota, GM, PSA Peugeot Citroen, Renault, Mazda, Daimler (Mercedes Benz), and Honda, issued press statements reaffirming their vehicles’ compliance with all regulations and legislation for the markets in which they operate; The Society of Motor Manufacturers and Traders described the issue as affecting “just one company”, with no evidence to suggest that the whole industry might be affected.
Renault-Nissan CEO Carlos Ghosn said it would be difficult for an automaker to conceal internally an effort to falsify vehicle emissions data, such as has happened at Volkswagen AG: “I don’t think you can do something like this hiding in the bushes.”