VW Settles UK Dieselgate Scandal

Seven years after the ‘Dieselgate‘ scandal erupted worldwide, Volkswagen (VW) has finally settled claims to English and Welsh drivers totaling some £193 million. More than 91,000 owners of diesel vehicles signed up to the court action, with the final result seeing most receive over £2,000 in compensation. London’s high court has subsequently dismissed the proceedings taken up against the VW group now that payments have been made.

The German manufacturer caused a sensation in 2015 after admitting that “cheat” or “defeat” devices had been installed on many of its models in an attempt to manipulate emissions test results.

The upshot was that the manufacturer claimed its vehicles expelled far lower levels of nitrogen dioxide than were really being emitted. The manipulation of figures extended across the groups vehicle ranges and included Audi, Seat, Skoda and VW brand cars.

Ongoing court actions continue in Scotland and Northern Ireland, with further settlements likely. In addition to any costs paid to claimants, the manufacturer will also face hefty legal bills running in excess of millions of pounds in addition to other costs.

The scale of pay out in the UK to date is however dwarfed by the worldwide figure. Over 12 billion pounds were paid out in response to a US class action suit, while total costs around the world have exceeded 26 billion pounds, with more potentially to come.

In addition to these actions, Martin Winterkorn, the former group chief executive, is facing a personal action; this is currently delayed due to poor health.

It is important to note that the VW group has not officially admitted that it has behaved unlawfully. Press releases have used the line that the payments were made to avoid far higher legal costs and lengthy proceedings.

Intriguingly, this appears to be the tip of a large iceberg in the motor trade sector; similar claims and lawsuits have been brought against a wide range of other manufacturers including worldwide heavyweights such as Ford, BMW, Mercedes-Benz, Nissan and Volvo.

Following the UK settlement, PGMBM partner Tony Winterburn commented that “This is a good day for the claimants and is the culmination of five years of hard-fought litigation.”. The action was pursued by several teams of lawyers from various firms including PGMBM, Leigh Day, and Slater and Gordon.

The motor trade industry has been rocked in the last few years both by scandals such as this one and other issues affecting consumers both in the UK and elsewhere.

There has been a lot of focus on rising insurance policy prices, but there are competitive prices and deals still to be had with established private and motor trade insurance brokers, while the current trend towards electric vehicles has raised significant concern over lack of suitable infrastructure and increase in high-speed charging prices.

Any dent to consumer trust in motor mechanics, tyre companies or other motoring manufacturers will certainly not help at a time when global inflation is spiraling, fortunately this isn’t the case right now – but sales of new cars in particular are down at the moment as everyone tightens their belts, knowing that previously-trustworthy manufacturers may have misled millions over their vehicle emissions will be yet another blow to the industry.