German court rules against Volkswagen in ‘dieselgate’ scandal

Volkswagen has lost a landmark legal battle in Germany’s highest civil court over compensation for the buyer of a secondhand minivan fitted with emissions-cheating software.

The world’s largest carmaker must take back the plantiff’s manipulated car and pay him €28,257.74 (£25,325), in a case that will lead to the company paying compensation to 60,000 German VW owners.

The ruling is the latest blow in the so-called dieselgate scandal, in which Volkswagen and fellow German carmaker Daimler have paid more than €30bn (£28bn) in fines and compensation around the world since it was revealed in 2015.

VW was found to have installed software that artificially lowered emissions of nitrogen oxides when the vehicles were being tested, meaning the output of the harmful pollutants were much higher in real-life conditions.

Germany’s federal court of justice said Herbert Gilbert was entitled to compensation for the purchase price of the Volkswagen Sharan people carrier minus mileage costs. Gilbert bought the car in January 2014.

Claus Goldenstein, a lawyer handling about 21,000 VW cases including Gilbert’s, said: “The ruling means legal certainty for millions of consumers in Germany and shows once again that even a large corporation is not above the law. Today we have made history.”

In the UK, Volkswagen faces 91,000 consumer claims under a group litigation order. A high court judge hearing the case found that Volkswagen installed a “cheat device” in cars under its Volkswagen, Audi, Seat and Skoda brands. Despite being found to have cheated emissions in the US, Volkswagen had disputed the accusation in the UK.

The dieselgate scandal rocked Volkswagen, with billions of euros wiped from its market value and fraud charges for its former chief executive Martin Winterkorn. The fallout has also been credited for spurring Volkswagen to accelerate plans to become the world’s largest manufacturer of battery electric vehicles, with zero exhaust emissions.

The latest ruling removes one of the last remaining legal risks to Volkswagen in Germany in relation to the scandal. The company in February paid a settlement with about 240,000 car owners in a separate action that will cost it about €750m.

Volkswagen said it would pay compensation in Germany as soon as possible and offer one-off payments dependent on individual claims.

A Volkswagen spokesman said: “The ruling of the German federal court of justice will bring closure for the diesel proceedings in Germany.

“Volkswagen is now seeking to bring these proceedings to a prompt conclusion in agreement with the plaintiffs. We will therefore approach the plaintiffs with the adequate settlement proposals.”

The spokesman said the carmaker did not expect there would be many more lawsuits from consumers because of a high rate of acceptance of settlements and limits on new claims.

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