Volkswagen faces first mammoth diesel lawsuit on home turf

GERMANY (AFP) – A case pitting hundreds of thousands of owners of manipulated diesel cars demanding compensation opened against German car behemoth Volkswagen (VW) yesterday, 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 began at 10am (0800 GMT) in Brunswick, around 30 kilometres 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, said 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. “I would like Volkswagen to reimburse the purchase price” said Andreas Sarcletti, a customer who had made the trip from nearby Hanover, “but I’m worried the trial is going to last a very long time”.

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.

In the mass lawsuit, the most important of around 50 questions for judges is whether Volkswagen “caused harm” by acting “dishonestly”. “We’re confident of our chances, since Volkswagen committed fraud,” VZBV lawyer Ralph Sauer told AFP ahead of the hearing. But VW lawyer Martine de Lind van Wijngaarden said there was “no harm and no basis to this claim” because “hundreds of thousands of cars are used” on the roads without problem.

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 further eroded, making a buyback cheaper for the firm.

To avoid such delays, the VZBV said it is “open” to an out-of-court settlement but “in that case, VW would have to pay a significant sum after all,” Mueller told AFP.

Given the wide variety of cases under the group action umbrella, VW finds a mass settlement “hard to imagine”.

In early July, judges noted in a preliminary opinion that some plaintiffs were living abroad.

That could mean German law does not apply to them.