Landmark German ruling against Volkswagen could cost it billions in the UK

8:20 am, May 29, 2020

A German court ruling that Volkswagen must buy back cars equipped with software that evaded emissions testing could have serious financial implications for the manufacturer over here, say legal experts.

As reported by Car Dealer earlier this week, VW lost a landmark case in the emissions scandal and has said it will pay some 60,000 owners the current value of their car based on the mileage driven since buying it.

Now a top lawyer here says that ruling, made in Germany’s highest civil court, could lead to VW forking out up to £10.2bn in compensation for UK customers.

Aman Johal, founder and director of consumer law action firm Your Lawyers, which has been given a steering committee position by the High Court and is representing 10,000 claimants in a UK case, welcomed the German ruling as a victory for consumer rights in the EU.

‘For UK motorists, as the jurisdiction is separate, the decision is not binding in UK law,’ he said.

‘However, emissions regulations are similar between the two countries, so it may be that the UK courts could draw influence from this key verdict in Germany.

‘The decision in Germany to penalise its biggest employer so rigorously shows how seriously the issue is being taken there, and it sets a high bar for British courts.’

Your Lawyers says more than 1.2m Volkswagen vehicles across England and Wales were affected by the 2015 dieselgate scandal.

‘VW has already paid out €30bn in fines and compensation claims, and there is no doubt that this could increase if the UK action continues on the path it is on,’ said Johal.

‘A court ruling is due before the end of 2022, when British motorists should know whether they will be receiving compensation and how much they could receive.

‘Based on a projected compensation payout of around £8,500 per claimant, Volkswagen could have to pay up to £10.2bn to UK customers, with the total cost of dieselgate being around €40bn.’

Meanwhile, Gareth Pope, of law firm Slater and Gordon, which is representing 70,000 VW customers in England and Wales, said: ‘This latest ruling in Germany is yet another blow for VW. For UK motorists, this decision confirms that a German court considers consumers have suffered loss and deserve to be compensated.

‘It is only a matter of time before the UK court concludes the same thing. The simple thing for VW to do is to settle the UK claims or else face another court ruling forcing it to compensate its customers.’

However, Volkswagen Group told Car Dealer Magazine that the High Court had issued an order saying the trial wouldn’t take place before March 2022

It has also issued the following statement: ‘The verdict of the German Federal Court of Justice does not change Volkswagen Group’s legal position, neither in Germany nor on an international level.

‘In particular, the decision in Germany has no consequence on any legal action in the UK. It relates to specific provisions of the German Civil Code.

‘The legal questions vary from one market to the other. Each jurisdiction is unique and the judgment of the Federal Court of Justice has little impact on cases in other countries.

‘The Volkswagen Group has consistently said that there is no legal basis for any claims against it in the UK. Our UK customers have not suffered any loss or damage as a result of the NOx issue.

‘The Volkswagen Group has defended itself robustly against all claims brought against it in the UK, and will continue to do so. The fact is that the vehicles are and were safe, roadworthy and legal to drive despite the NOx issue.’

The German ruling could also have a bearing on a similar case affecting an estimated 500,000 Mercedes-Benz vehicles across the UK, according to Your Lawyers.

Johal said: ‘Earlier this year, it was announced that up to half a million Mercedes owners are potentially eligible for compensation payments if it is established that their vehicles contain a “defeat device”.

‘It will take years until we know the full extent of the financial costs for Mercedes as well as the reputational damage this scandal could inflict. But if similar to the VW case, we could see billions of pounds worth of fines and customers receiving thousands of pounds in compensation.’

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