The burden of the “dieselgate” lawsuits

The burden of the 'dieselgate' lawsuits

If you look at the latest car sales figures, you have to assume that VW is swimming in money. Despite "dieselgate," the company continues to deliver more vehicles.

The coffers of the car giant, which also has to finance the profound change in the industry towards e-mobility and digitalization, are well filled.

But they were, too, when volkswagen had to indemnify its customers in europe as well as in the united states after the emissions affair? More than 25 billion euros have been spent to clear up the legal hurdles. And in europe? VW is deliberately drawing comparisons with plaintiff car owners, as lawyers accuse the wolfsburg company of doing?

The company makes it clear that the number of settlements is small compared to the total number of proceedings. Whether the group decides to settle in court depends on economic considerations and each individual case.

Christopher rother, a lawyer with the u.S. Law firm hausfeld, says it is clear, however, that there is an intent behind it. VW first settles on appeal before the respective court has a chance to make a decision. According to his statements, claims will expire at the end of this year, which is why rother sees a "very clever litigation strategy. This prevents a final judicial clarification of the question of whether VW is liable for damages as a manufacturer: "the strategy has largely succeeded."

If volkswagen, on the other hand, had to indemnify all customers with cheating diesels like in the USA, then that would be with an average dispute value of 25.000 euros "not economically viable," believes rother. He is not alone in this view: the former head of the VW group, matthias muller, also argued at the time that settlements like the one in the US would ruin volkswagen.

How many civil disputes are there?? In total, there are around 23,100 pending cases in germany involving car owners who drive a manipulated diesel from the VW group. There have been around 6,000 diesel-related verdicts so far – according to company sources, most of them without success for the customer.

So far, only eleven rulings have been handed down by the higher regional courts (OLG), all of which have been in favor of the manufacturer or its dealers. In addition, there were numerous rejection decisions by higher regional courts, including the "overwhelming majority" in favor of volkswagen. At the same time, VW’s net cash position as of 30. June at just under 26.3 billion euros. According to the hausfeld lawyer, it would only cost volkswagen around 500 million euros even if a settlement had been reached in all cases in germany.

Actually, the total number of lawsuits is relatively small. Worldwide, the diesel emissions scandal that was uncovered in the USA in september 2015 involves around 11 million cars; in germany, the figure is over 2.2 million cars. In this country alone, over 97 percent of the vehicles affected have already been updated with software – across europe, the figure is just under 78 percent, or 6.3 million cars.

Rother explains, via the internet platform "myright.About 50 of them had.000 damaged VW customers registered. These cases were bundled in a few proceedings. In his view, most of them could be legal insurance traps – other potential plaintiffs were deterred from asserting their claims because they had to pay the court costs in advance. This is another reason why VW does not settle until the appeal stage.

Volkswagen is not alone in taking such an approach. Other companies and even the state also prevent feared precedent rulings to their disadvantage here and there by giving way in individual cases. This has been the experience of bank and insurance customers, for example, in proceedings before the federal court of justice (BGH). And the tax authorities occasionally agree with taxpayers in individual cases, so that the federal fiscal court (BFH) does not issue a fundamental ruling that could put many taxpayers in a better position.

Federal judge and federal fiscal court spokesman christoph wager explains how it works. Judges often give the parties in a case a court order that shows how the senate sees the matter. If the parties do not insist on an oral hearing, this notice is already considered a judgment. "It sometimes happens that the tax authorities throw their hands up in horror and say: "there is no chance of convincing the senate".""

Then the tax office requests an oral hearing, but at the same time satisfies the claim of the plaintiff taxpayer. The case is settled, the oral hearing is canceled, there is no judgment. "But that doesn’t happen on a regular basis, it’s very rare," explains wager.

The OLG oldenburg had in fact indicated in a preliminary ruling that VW had caused material damage to those affected by the emissions scandal. The plaintiff then withdrew his complaint. At the very least, this suggests that there could have been an extrajudicial deal here, too.

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