German court deals 'Dieselgate' blow to VW customer
February 19, 2019
A regional appeals court has rejected a claim by a VW owner backed by legal services group MyRight. But the verdict means it could now be the first "Dieselgate" compensation case to go to Germany's supreme court.
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A court in the northern German city of Braunschweig on Tuesday rejected a compensation claim against carmaker Volkswagen brought by a plaintiff represented by legal services group MyRight.
The verdict paves the way for MyRight to now appeal the decision at the Federal Court of Justice.
VW welcomed the verdict, saying that it meant that buyers of diesel vehicles had no claims against the company.
The plaintiff was calling on VW to pay back wholly or in part the sum for which he purchased a diesel vehicle nine years ago. His first attempt to claim compensation at a lower court in Braunschweig also failed.
MyRight founder Jan-Eike Andresen was, however, not fazed by the court's decision, saying his company was now in the "finals" with VW, which he called an "outstanding success for our young firm."
The case in Braunschweig has been followed with great interest because the consumer rights group MyRight is representing some 35,000 owners of VW diesel vehicles in Germany affected by the "Dieselgate" scandal.
VW's emissions scandal plunged the automaker into its deepest crisis ever. It brought with it everlasting damage to VW's reputation and massive fees and penalties — not to mention compensation claims from car owners.
Image: picture-alliance/dpa/J. Stratenschulte
The disaster unfolds — September 2015
About two weeks after Volkswagen admitted behind closed doors to US environmental regulators that it had installed cheating software in some 11 million of its diesel vehicles worldwide, the Environmental Protection Agency shared that information with the public. It was September 18, 2015. The ensuing crisis would eventually take a few unexpected turns.
Image: picture-alliance/dpa/O. Spata
The boss must go, long live the boss — September 2015
Volkswagen's then-CEO Martin Winterkorn (above) had little choice but to step down several days after news of the scandal broke. In September 2015, he tendered his resignation, but retained his other posts within the Volkswagen Group. Winterkorn's successor was Matthias Müller. Until taking the reins at VW, Müller had been the chairman at Porsche, a VW subsidiary.
Image: picture-alliance/Sven Simon
Raiding headquarters — October 2015
Regulators in the US weren't the only ones investigating VW. Authorities in Lower Saxony, the German state in which VW is based, were also scrutinizing the company. On October 8 2015, state prosecutors raided VW's headquarters along with several other corporate locations.
Image: picture-alliance/dpa/P. Steffen
Hell breaks loose — January 2016
On January 4, 2016, the US government filed a lawsuit against VW in Detroit, accusing the German automaker of fraud and violations of American climate protection regulations. The lawsuit sought up to $46 billion for violations of the Clean Air Act.
Image: picture-alliance/dpa/A. Burgi
Quit or forced out? — March 2016
In March 2016, the head of VW in the US, Michael Horn, resigned. In the initial days and weeks after the scandal broke, he was the one US authorities turned to for information. He issued an official apology on behalf of the automaker, asking for the public's forgiveness.
Image: Getty Images/C. Somodevilla
Settlement — October 2016
On October 25 2016, a US judge approved a final settlement that would have VW pay $15.3 billion. In addition, affected cars would be retrofitted with better, non-deceptive hardware and software, or else VW would buy them back completely from customers.
Image: picture-alliance/dpa/P. Pleul
Imitators — July 2017
When dieselgate first emerged in 2015, analysts said it was likely other car makers were also cheating tests. But it wasn't until 2017 that other companies were targeted in probes. In July, German authorities launched investigations into luxury car makers Porsche and Daimler for allegedly cheating emissions tests. Others, such as Audi and Chrysler, have also been hit by similar allegations.
Image: picture-alliance/dpa/F. Kraufmann
Public still supportive — December 2017
Despite dieselgate, VW has managed to keep the emissions scandal from utterly tarnishing its image. According to several polls, between 55 to 67 percent of Germans continue to trust the automaker. In the US, polls show that roughly 50 percent still believe the German company produces worthwhile vehicles.
Image: picture-alliance/dpa/C. Klose
Fuming over monkeys — January 2018
In late January, however, VW suffered another heavy blow over reports that the company experimented on monkeys and made the animals inhale diesel fumes. To make matters worse, a separate experiment that had humans inhale relatively harmless nitrogen dioxide was revealed at the same time. Some media wrongly interpreted this to mean humans were also inhaling toxic fumes.
Image: picture-alliance/dpa/F. Gentsch
Canadian court demands millions — January 2020
Years after the scandal that caused Volkswagen to pay CAN$2.4 billion (US$1.83 billion), a court in Toronto order a further fine of CAN$196.5 million. Volkswagen pleaded guilty of violating in environmental laws. Prosecutor Tom Lemon noted that the fine was "26 times the highest fine ever for a Canadian environmental offence."
Image: picture-alliance/dpa/R. Knipping
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More to come?
VW is facing thousands of compensation claims after it was discovered that the carmaker was using programming software to manipulate emissions outputs so they conformed with legal standards. The company has already spent more than €27 billion ($30.7 billion) in fines, damages, investors' compensations and technical upgrades, it said in December.
The company says that most of the lawsuits brought against it have been decided in favor of it or of VW retailers. Of 50,000 cases in Germany, VW says, some 14,000 have already been decided.
MyRight, which is backed by the US global law firm Hausfeld, says on its website that its class actions over the diesel scandal surrounding the German carmaker are seeking more than €800 million in compensation for losses incurred by owners of VW diesel vehicles. The group says it wanted the present case in Braunschweig to clarify all the legal issues regarding compensation associated with the emissions scandal.
Class-action lawsuits, a common practice in the United States, have been relatively rare in Europe and Germany up to now. But legislation that came into force in Germany in November now allows class actions, albeit with strict limitations, including the stipulation that such a complaint can be filed only by specially authorized consumer protection associations.