Volkswagen in ‘Dieselgate’ settlement talks with 400,000 German owners

Volkswagen is in discussions over an out-of-court settlement with more than 400,000 German owners of vehicles that were affected by the carmaker’s “Dieselgate” emissions-rigging scandal.

Germany’s VZBV – an umbrella group of consumer rights organisations – said it had entered talks about a “pragmatic solution in the interests of customers” but stressed that talks were at a very early stage and would remain confidential.

“There is no certainty that an agreement will be reached,” the consumer body said in a joint statement with VW.

Volkswagen has already compensated VW owners in the US and Australia over the manipulation of data about the emissions of its diesel vehicles.

It is also facing a class action lawsuit in the UK, where 90,000 of its customers are claiming that the company fitted devices designed to cheat clean air laws to 1.2m cars.

The carmaker, which employs 630,000 people, admitted in 2015 to manipulating 11m vehicles worldwide to fool emissions tests.

It said last year that total costs relating to the scandal have soared past £25bn, while sales of diesel cars have plunged around the world in the wake of the affair.

In the US VW pleaded guilty two years ago to criminal charges and paid out $4.3bn (£3.3bn) in civil and criminal penalties – the largest levied by the US government against a car company.

Last September VW settled a multimillion-dollar class action in Australia over the global diesel emissions scandal and will pay up to Aus$127m (£67.5m) in compensation to customers. Volkswagen made no admission of liability under the agreement.

Talks over a settlement to resolve claims in Germany come just three months after the legal case got under way. The trial is being held in Braunschweig, close to Volkswagen’s Wolfsburg headquarters. The regional court had asked VW to consider opening settlement negotiations by the end of 2019.

The claim is a declaratory model action, a new form of German legal instrument similar to US class actions or group litigation orders in the UK. The instrument was created to allow collective redress for consumers.

A spokesman for Volkswagen said at the time the company would defend itself against the claims rigorously, saying it believed the claims were unfounded.

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

The novel nature of the action means the case is expected to last up to four years.