More than four years after Volkswagen’s deceptive emissions practices were first uncovered, the company still finds itself wrestling with how to compensate consumers for their non-compliant vehicles. Today Volkswagen announced that negotiations with a German consumer advocacy agency, VZBV, for a financial settlement for VW owners have broken down. Nevertheless, it appears likely that VW owners will still receive some amount of compensation – but the VZBV looks as if it will walk away empty-handed.
The VZBV initiated the case against VW in the High Court in the German city in Braunschweig in September 2019 in on behalf of over 430,000 consumers. The plaintiffs are seeking compensation for the lost value of their vehicles as a result of Volkswagen’s cheating on vehicles’ emissions output and for drivers’ diminished ability to drive their cars since Diesels are prohibited from many German cities. Both parties have been negotiating since the start of this year for damages to be paid to Volkswagen owners. The VZBV received support from Germany’s largest automobile club, the ADAC, which is roughly the German equivalent of AAA in the United States.
In a press release today, Volkswagen announced that those settlement negotiations collapsed due to what it called an “unjustified demands” for € 50 million in attorney fees. This amount is additional to the € 830 million that both side agreed upon for VW owners. However, VW declared that it is prepared to pay that sum to those consumers who had joined the class-action suit and who bought their Diesel vehicles before 2016. The VZBZ stated that it was “perplexed” by Volkswagen’s announcement since they received a settlement proposal from Volkswagen just before learning that the company had broken off negotiations. The VZBZ further said that the negotiations had failed due to Volkswagen’s “unwillingness to allow for a transparent and trustworthy system . . . for a settlement.”
Whether the VZBV will continue proceedings against VW to recoup attorney fees remains to be seen. One thing that is significant about this case is the way it illustrates the new class-action structure in the German legal system. Prior to November 2018 plaintiffs could only bring individual lawsuits to recover damages. Under this new system, multiple plaintiffs can join a case and be represented by an organization that acts on their behalf in court. While class-actions are common in the United States, they are still a relative novelty in Germany, and they also differ from American class-action law suits in some significant ways. For example, should the case against VW succeed plaintiffs would still need to file their own proceedings against VW to claim damages since these can vary greatly from one consumer to another.
GermanLegalBlog.com 