German car manufacturer Volkswagen is to face trial over allegations of emissions fraud at London’s High Court today in what has been described as “the biggest consumer class action in England and Wales history”.
Some 60,000 car owners are taking action against the car giant for installing “defeat devices” in around 11 million cars worldwide between 2009 and 2015.
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This software helped diesel-engine cars from all Volkswagen brands, including VW, Seat, Audi and Skoda, cheat emission tests and look less polluting than they actually were.
With around 1.2 million of these cars sold in the UK, a three-day trial will begin today in order to determine which law firm will challenge Volkswagen.
The scandal was brought to light in North America in September 2015, after which VW admitted to having deliberately used the software.
The company then paid $2.8 billion in compensation and offered to buy back half a million of the cars, registering a total damage of $25 billion.
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By GlobalDataHowever, consumers outside North America have so far received no recompense, and now legal groups in the UK are seeking to obtain compensation and have started signing up claimants in the aftermath of the scandal.
Currently operating on a “no win, no fee” basis, in the past few years legal firms have been debating over which should lead the case and were recently supported by legal funding group Therium Capital Management.
The group takes a share worth about 25% of any compensation won, in return for bankrolling the case.
However, winning such a trial is proving to be tougher than expected. In fact, despite admitting the fraud, VW is arguing that the software was not necessary to pass the EU test and therefore does not technically violate the law.
Things are even more complicated for EU claimants since testing rigged cars without the software to understand the real reading is not possible.
With no regulators in Europe being able to come up with a sizable fine against Volkswagen, previous lawsuits failed to get as much attention as they did in North America.
Proceedings in the US and Canada were handled quickly as getting rid of the damaged cars as soon as possible was priority for North American courts and VW was only able to buy them back.
Read more: VW just gave employees a 40% bonus bump after sales climbed last year
Europe’s situation is different. Here, Volkswagen offered “technical measures” that enabled the rigged cars to meet the EU requirements without jeopardising performances.
VW repaired around 820,000 vehicles in the UK, claiming the majority of consumers were then “fully satisfied”.
Starting today, law firms involved in the case will argue to gain the chance to lead the litigation order. These are Your Lawyers, representing over 10,000 claimants and Slater & Gordon, with around 45,000 clients.
Another firm, Harcus Sinclair, was recently ordered to stop representing claimants in this lawsuit after breaching a non-disclosure agreement that brought further delays.
A spokesman for Slater & Gordon defined the case as the most complex class action in the UK.
He told the Telegraph:
We need to make sure that we are not repeating claims and running up costs for the same work. We’re going up against a giant car company and need to make sure we’re prepared.
Aman Johal, director of Your Lawyers, said:
More than a million Volkswagen owners have been lied to and deserve compensation. The level of deceit perpetuated by the Volkswagen group is beyond comprehension and amounts to one of the largest corporate scandals of all time.
Yet Volkswagen reiterated that it has not broken any law in the UK and said:
Our consistent position has been that the instigation of UK legal proceedings was both premature and unfounded, and we will robustly defend any such litigation. There is no legal basis for customer claims in connection with the diesel matter.
